This is probably one of the most common questions we get. People are wondering whether or not they can still get a mortgage or a home loan even if they have less than perfect credit. Many people feel that homeownership is simply out of reach if they have had poor credit scoring, dings on the report, or red flags in the past but that’s not necessarily true. We’ve helped hundreds of people find the right loan and program for their finances regardless of perfect credit scores. However, there are some things to understand about a mortgage when you have less than perfect credit.
With a credit score of at least 660, there are more options available with fewer fees and penalties. This is not to say that those under 660 cannot get a loan, but there may be some additional interest rates and fees. Before even talking with a lender it’s important to know your own financial situation. Get a copy of your credit history, score, and report from one of the three major suppliers, Experian, Trans Union, and Equifax. You can usually get a free report once per year per department. Check for any errors, correct mistakes, or pay off small loans that you may have completely forgotten about. These small loans can add up and interest rates can compile. If your credit score is below 680, take a couple of months to make sure that all of your bills are paid up, paid off if possible, and everything is paid on time. Even just a couple of months of maintaining a good credit strategy will help your score tremendously.
There are a lot of different options for people with a wide range of credit scores. For instance, FHA loans are obtainable for anyone with a credit score of 580, or around there. But, even if you have a score lower than 580, there could be some options available. We have down payment assistance programs, low-income programs, and options for those with lower credit scores. If a previous partner or spouse has affected your credit score, that could be something we can work around.
You can see that I’m not being too specific here. The reason for that is that everyone has a different financial situation. There is no one box to fit every person out there. We might tailor a plan to get you into a higher credit score within the next six months, potentially saving you thousands in interest rate fees. Maybe there is a way to offer a grant or down payment assistance program now and refinance at a later time for a lower rate.
There’s just no one size fits all system when it comes to a home loan and the programs therein. Each state and even county offers different programs and government-backed options to help just about every homebuyer out there. If for some reason there’s nothing we can do now, at the very least, we will work up a plan to get you into a home within the next two, four, six, or 12 months. There are options and knowing your options is one of the best ways to get started.
Give us a call today and let’s discuss a few things over the phone and have you answer a few questions. We may be able to offer something immediately or provide a plan to get you into a home of your own within the next year.