Purchasing a home is a large financial commitment. A buyer's credit score will affect their ability to obtain a mortgage. This is especially true when their FICO scores are below 620. What does an individual with a low credit score to do when looking to obtain a mortgage? Below you will find tips on obtaining a mortgage with a low credit rank.
One thing that helps individuals obtain a mortgage even when having a poor credit score is that FICO scores are putting less weight on medical bill collections. Medical bills actually account for more than half of all unpaid collections on consumers' credit reports.
Expectations In Obtaining A Mortgage With A Low Credit Score
Get Ready To Shell Out A Bit More: Individuals looking to acquire a mortgage with less than perfect credit should expect that they will pay more than those with credit scores on margin or better. If you have previously gone through a short sale it is advisable to wait at least two years before trying to obtain a new home loan.
Recognize That You Will Want To Refinance ASAP: A buyer that obtains a mortgage with an imperfect credit ranking should look to refinance in two years. This will give individuals plenty of time to raise their credit score. A mortgage obtained with bad credit is only a short term solution that gets buyers into a home. Never allow bad credit to follow you any longer than it needs to. Refinancing to a lower interest rate as credit scores increase is a way to ensure that doesn't happen.
Speak With A Mortgage Broker Regarding Your Options: There are many options in regards to obtaining a mortgage. A popular option is a thirty year mortgage; this however may not be the best option with a low credit rating. Check with a mortgage broker to look at other options such as an adjustable rate mortgage. This is one way to borrow money for a home loan while helping to repair and maintain a better credit score. Often times an adjustable interest rate is lower than a fixed mortgage rate, at least in the short term.
Seek Out A Co-Signer: If a borrower has other assets, they may be able to secure a better mortgage interest rate when securing a home loan with a co-signer. Check with the Federal Housing Administration about having a co-signer on the loan. When damaged credit is involved it is particularly important to check with HUD, FHA, the FHFA, Fannie Mae and Freddie Mac to help along the way to homeownership even with poor credit.
Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.