Mortgage options if you have past credit issues
To understand the options for clients with past credit challenges we must look back to our original mortgage building blocks of down payment (equity in the case of a refinance), credit, and income. For clients where credit is not as strong we either need to strengthen our application with down payment or income, or income from an outside source. We can proactively work together to do this by:
Adding down payment strength to your mortgage:
If your credit is not able to be approved by traditional banks and trust companies but we have strong down payment and reasonable income we often work with a couple of lenders who specialize in helping approve clients with past credit issue. Depending upon the degree of the past credit challenge, the down payment or equity required is typically between 20% and 30%. With this specialized option we are often able to offer shorter two to three year terms along with mortgage rates that are a bit above the very best but still good. This allows you to finance your home with good interest rates while we work with you to re-establish your credit so when your mortgage comes for renewal in two to three years we are able to move your mortgage back to a more traditional lender and offer you best rates and terms.
Adding income and credit strength to your mortgage:
If adding additional strong down payment is not a preferred option we are instead able to strengthen your application by adding a family member as a strong cosigner. A strong cosigner is someone who has relatively strong income, limited personal debt, and an average to good credit score and history. Adding a strong cosigner can allow us to proceed with your approval with as little as 5% down payment.
We are here to help and are happy to answer your questions for you. Together we will be able to map out your mortgage options for today or work together on a plan so that you can be approved for your new mortgage down the road. Please always feel free to contact us via phone, online application, or contact form and we would be happy to work with you.