Poor Credit? Yes, you can still get a mortgage.
Getting a mortgage can be a difficult process, especially if you have poor credit. However, it is not impossible. As a mortgage broker, I have helped many clients with poor credit get approved for a mortgage. In this blog post, I will go over some tips on how to get a mortgage with poor credit.
Check Your Credit Report
The first step to improving your chances of getting approved for a mortgage with poor credit is to check your credit report. Your credit report will show you what factors are affecting your credit score and give you a better understanding of what you need to do to improve it.
You are entitled to a free credit report from each of the three credit reporting agencies every 12 months. Review your credit report carefully and look for any errors that may be negatively impacting your credit score. If you find any errors, dispute them with the credit reporting agency.
Work on Improving Your Credit Score
Improving your credit score is crucial if you want to get approved for a mortgage with poor credit. There are several things you can do to improve your credit score, including:
- Pay your bills on time: Late payments can have a significant negative impact on your credit score. Make sure you pay all your bills on time, including credit card bills, car loans, and any other debts you may have.
- Reduce your debt: High levels of debt can hurt your credit score. Try to pay off your debts as much as possible before applying for a mortgage.
- Avoid opening new credit accounts: Opening new credit accounts can lower your credit score. Try to avoid opening any new credit accounts until after you have been approved for a mortgage.
- Keep your credit utilization low: Your credit utilization ratio is the amount of credit you are using compared to your credit limit. Keeping your credit utilization low can help improve your credit score.
Work with a Mortgage Broker
Working with a mortgage broker can be beneficial if you have poor credit. We have access to a wide range of lenders and can help you find a lender who is willing to work with you despite your poor credit.
Mortgage brokers can also help you understand the different types of mortgages available and what requirements you need to meet. We can guide you through the mortgage process and help you prepare your application.
Consider Alternative Mortgage Options
If you are unable to get approved for a traditional mortgage, there are alternative mortgage options available. Some of these options include:
- FHA loans: FHA loans are backed by the Federal Housing Administration and are designed to help individuals with poor credit or a low down payment get approved for a mortgage.
- VA loans: VA loans are designed for veterans and their families and offer low or no down payment options.
Getting approved for a mortgage with poor credit can be challenging, but it is not impossible. By checking your credit report, improving your credit score, working with a mortgage broker, and considering alternative mortgage options, you can increase your chances of getting approved for a mortgage despite your poor credit.