GET A MORTGAGE WITH NOT SO PERFECT CREDIT
There are many different situations that can be experienced through life that result in credit issues. Because of that, mortgage lenders are willing to listen to you about any situations that may have affected your credit. Although every person's situation is different, there are some general things that you should know.
FICO SCORES The majority of the mortgage lenders use FICO scores to get their first impression of your credit worthiness. FICO scores are credit analysis tools. They tell the lender with one quick glance whether or not you have had problems with your credit. FICO's range from 400 to 900. The lower the score, the higher credit risk. Most lenders want to see FICO's above 620.
FICO scores are only a tool. They do not determine whether or not you will be approved for a mortgage. FICO's are affected by many things. Some things that can affect your FICO are when someone checks your credit history, when you have high balances on your credit cards, when you have very little credit, when you have many open credit cards (regardless of balances) and payment histories. If you have any information being reported on your credit report that does not belong to you or is in error, you need to get it corrected. If this information is derogatory, it could be making your FICO appear low.
BANKRUPTCY/FORECLOSURE If you have had any type of bankruptcy or foreclosure in the past two years (from the date of discharge), you probably will not be granted a mortgage from a mainstream lender. If you have had a bankruptcy or foreclosure over two years ago but within four years, it must have been due to circumstances beyond your control. Some examples of this are the following: 1) Medical problems and lack of insurance coverage (or maybe you reached your limit in coverage and had to pay expenses out of your pocket.) 2) Divorce that resulted in an increase in bills and/or loss of income to pay the bills that were handled by two incomes in the past. (Just because you got a divorce and had legal fees is not an acceptable extenuating circumstance to declare bankruptcy or go into foreclosure.) 3) Loss of job, which lasted long enough for the loss of income to substantially affect your financial well being and forced the need to file bankruptcy for protection from creditors or even have a foreclosure. (A loss of a job for two weeks does
Latest Articles