Many people mistakenly believe that a borrower must have stellar credit to obtain a mortgage loan. However, this is not the case. It is possible to get a mortgage for the home of your dreams, even if your credit isn’t the best. The following tips will help you find a loan and a lender that meets your needs.
First and foremost, you should shop around and consult several lenders before you settle on one. This is good advice for any loan, but it is especially important when you are looking to obtain a mortgage. Find a lender that will work with you given your credit history. This doesn’t mean that you should select the first lender that extends an offer of credit. You can still obtain a mortgage with a decent interest rate and fair repayment terms. Some lenders may attempt to take advantage of you due to your credit score. Don’t let this happen; find a lender that will offer you decent loan terms before you start filling out applications for credit and putting inquiries on your credit file.
If you have recently started a job that comes with a substantial increase in pay, you have come into a large sum of money or you had some other favorable circumstance that isn’t reflected in your credit report, look for a lender that will do manual underwriting to help you obtain the loan. The manual underwriting process is tedious and requires a lot of legwork from you, but is well worth it when you are approved for a loan at a low interest rate and fair monthly payments.
In the Meantime
During the process of obtaining a mortgage, and after, you should keep working hard to clean up your credit report and increase your credit score. Pay off old and past due debts. Keep current obligations current. And do everything you can to pay off credit cards, loans and other obligations so you can improve your credit score.