If you have less than perfect credit, you can get a loan.
FICO scores, also known as credit scores, can range from 300 to 850 with 850 being perfect.
The average score in the US is about 720.
Even with an average credit score, which usually has a few dings, you can qualify for great rates on a mortgage.
Many people assume their credit is worse than it is. Late payments are not counted as being late by the credit bureaus until they are 30 days past the due date. Making minimum payments every month does not hurt your credit score. Carrying balances on your credit cards does not negatively affect your credit score, and may actually help it if your balance is between 30% and 50% of the credit limit for that card.
You can email me at info@TheMortgageU.com if you have any questions about what may or may not help to improve your scores.
Unless your credit is truly horrible, you can probably get a home loan. You will, however, pay a high rate of interest and your loan will likely be an adjustable rate loan with a two year fixed term. But, take that loan and start repairing your credit so you can refinance after two years into better terms. Set a budget and stick to it, stop using credit cards, and consider meeting with a financial planner who can assist with these steps.
Less than perfect credit can be caused by having to many inquiries in a short period of time. Inquiries account for 10% of your total credit score. If you are shopping for a mortgage, a new car, and more credit cards then the variety of inquiries will pull down you credit score more severely.
Many Americans out there think that they need to continue renting and they will never be able to realize the great American dream of homeownership. This however could not be any further from the truth. There are home loans out there for people with all types of credit and there are many mortgage brokers out there who can assist, educate, or direct consumers on what to do or where to go to help increase their credit scores so that they can qualify for financing that makes sense to them. There are many short term programs out there to assist people into getting into a home and then within a couple of years you can refinance out of the short term program into something a little more long term with much better terms. Consult a mortgage consultant now to find out what you can qualify for.
Over the past few years lenders have come out with new programs to fit nearly every type of customer. Even if you have a recent bankruptcy there are many lenders who can approve you for the purchase of a new home, in some cases as soon as 1 day after your discharge.
Understand that having bad credit is still undesirable. Even though you can get a loan, the terms won't be as favorable as if you had good credit. You may not be able to get 100% financing, a low rate, or low closing costs. If this is okay with you, then call me today at 888-418-4467, and I may be able to help.
If you're looking to repair your credit, you might consider a Consumer Credit Counceling agency.
Consumer counseling can hurt your credit in the short term. It will show up on your credit report. However the long term benefits should greatly outweigh this.
Loan applicants with bad credit should expect to pay higher interest rates than borrowers with good credit history. Lender banks surcharge for higher risk loans.