Over 30% Of Applicants With Less-Than-Perfect Credit Were Denied Mortgages Last Year
A new study published by Urban Institute’s Housing Finance Policy Center (HFPC) shows that unless you have a nearly perfect credit profile, the chance of being rejected for a mortgage is nearly one in three.
Luckily, we’ve compiled some tips to make sure your credit is mortgage ready!
If you're looking to purchase a home, chances are you've done some research about the mortgage process. The first step in securing a mortgage is getting pre-approved. Most realtors won't even start showing homes to a buyer unless they have completed the pre-approval process. If you have a FICO score of 680 or under, whether due to bankruptcy, foreclosure, divorce, change of employment, etc. it can be very difficult and seemingly impossible to get pre-approved for a mortgage. The pre-approval process is based almost entirely off of your credit history and credit scores. So what do you have to do to get pre-approved with a low credit score? Is it even possible to do so without waiting years for accurate/negative items to run their course on your credit report? If you've asked yourself these questions recently, you've come to the right place!
Here are some facts about the pre-approval process and how your credit history is involved. Your credit score (an algorithm based on your credit report) indicates to lenders how well you manage your finances. Most lenders use a FICO score of well over 700 as the cut-off for the best interest rates. The problem lies in the fact that the credit scoring process is extremely complex and rife with controversy over inaccuracies. The credit bureaus: Transition, Equifax and Experian are private, for-profit businesses and they hold a monopoly over the credit-scoring standards. Until recently there has been little regulation over how your credit report and credit score is calculated. Even with new reform in place the responsibility still lies with the consumer to ensure that their credit items are being reported correctly. This can be a daunting task even for professionals and requires around the clock monitoring and in-depth credit procedural knowledge.
Most Americans have bumps in their credit history. Unfortunately, many more have been plagued with poor credit due to improper reporting techniques. Add to that the fact that there are thousands of credit repair companies that lie to consumers using drawn-out procedures and leaving promises unfulfilled. With all these odds stacked against the average, hard-working consumer, getting a mortgage with a low credit score can seem almost impossible. The question is can you purchase a home on terms that make it worth your while? Before shopping for rates, we recommend that buyers commit to cleaning up their credit. This is the single most important step in purchasing a home so that it is the most beneficial for you, the homeowner.
So now that you know who is not in your corner, we are here to ensure you that you're not in this alone! We have helped thousands of clients get pre-approved for mortgages with subprime credit scores. Select Us LLC works exclusively with consumers looking to purchase homes, so our techniques are based around your individual situation, but geared specifically for you pre-approval/home buying needs. We not only have over 20 years in the credit industry, but even longer working with professionals in the housing industry.
We work with clients from start to close and can help with every step along the way. We can refer real estate agents and mortgage brokers that would be the best fit for achieving your goals! If you are even thinking about starting the pre-approval process, do yourself the favor of contacting our specialists. We offer free consultations with an in-depth credit analysis and will pinpoint the exact strategy needed to purchase with power. If you think you can't afford to use professional help, we know from experience you can't afford not to.