One common question homebuyers ask is, “Is it possible to buy a home if I do not have perfect credit?” First time homebuyers especially worry about this because they are often still in the process of establishing good credit.
The short answer to your question is, “Yes, you can still purchase a home if this is your situation.” Below, are some detailed recommendations for moving forward with the home buying process without ideal credit:
- Work with a local mortgage company. Our first suggestion is to choose a Boston mortgage company actually based here, rather than one that is nationwide. The reason is twofold. To start, big banks often turn customers away when there is an obstacle with credit or other financial difficulties, whereas a local company is more likely to work through those obstacles with you. The second reason is just that you will likely get better service overall from a local mortgage company rather than a big box lender that sees you as a number instead of a neighbour.
- Look into loan products that can help. A number of mortgage products exist in part to help borrowers who are in situations similar to your own. These include government-backed loans such as FHA mortgages and VA mortgages. FHA loans are backed by the Federal Housing Administration. VA loans are backed by the Department of Veterans affairs. Relaxed credit qualifications are among the benefits of both these types of loans. It is the backing from the FHA and VA that makes this possible along with other advantages.
- Lean on your other metrics. It is important to keep in mind that it is not just your credit score lenders look at when making decisions about mortgage applicants. They also consider your debt-to-income (DTI) ratio, your income, and even your assets. If you have strengths in these areas, that is going to help your loan application. Take a close look at your DTI ratio. Is there anything you can do to improve it? For example, can you pay off one of your other loans? If you can, your DTI ratio will be more competitive. Your credit might get a boost too. That brings us to the next point.
- Try raising your credit score before you apply. Have you thought about trying to increase your credit score? You might assume that your current credit score is not going to change fast enough to make a difference in your loan application. But you might be mistaken.
There are a lot of ideas for boosting your score quickly. A few include:
- Checking your credit reports for errors and submitting corrections (you might be shocked at how common these errors are).
- Catching up on late payments and contacting lenders to ask them to remove negative items (this can work if you have a good relationship with them).
- Drop your credit utilization ratio.
- Ask your creditors to increase your credit limits.
Style Mortgage Wants To Help You Buy a Home Now With Less Than Perfect Credit
Whatever your financial scenario, Style Mortgage is the local mortgage company that can help you work around obstacles and move forward with purchasing a home. If you are ready to get started, please give us a call today at (508) 223-5206 to schedule your consultation.
This information is intended for informational purposes only and is not an offer to lend. All applications are subject to approval.