28
Apr
By support
Home Mortgage Tips

Yes, It’s Possible to Get a Mortgage Without a Favorable Credit History – Here’s What You Will Need

Yes, It's Possible to Get a Mortgage Without a Favorable Credit History - Here's What You Will Need There are several factors that are reviewed when you apply for a home mortgage, and one of the initial factors is your credit rating. You may already be aware that you have a lower credit score, or you may have learned about your credit issues after speaking with a mortgage professional. Now that you are aware of the situation, you may be concerned about your ability to get approved for your loan request. The good news is that you may still be able to get a mortgage without a favorable credit history with a few things.

A Co-Borrower Or Co-Signer

One of the best steps that you can take to strengthen your loan request is to find a co-borrower or co-signor for your loan request. Ideally, this will be an individual with a spotless credit history and great scores. There may be some rules in place regarding who can co-sign with you, so you may consider getting more advice from your mortgage representative before moving forward with this option.

A Large Down Payment

The size of your down payment essentially impacts the level of risk that a lender assumes when extending a loan to you, and your loan request is riskier to approve when you have a lower credit rating. You may be able to offset the fact that you have a troubled credit history by making a larger down payment. This may be a down payment that exceeds a standard 20 percent down payment.

A Willingness To Accept A Higher Interest Rate

Mortgage lenders typically have a tiered interest rate structure, and those with a lower credit score will qualify for a higher interest rate. There typically is a minimum threshold to the tier system, and each lender has a different minimum score that they will consider. However, generally, if you have a lower credit rating, you should be prepared to accept a higher interest rate with your loan request.

A lower credit rating will impact your ability to get approved for the best terms on a mortgage, but this does not necessarily mean that you cannot get approved at all. There are various steps that you may be able to take to strengthen your loan request and to structure the loan application so that underwriting will approve it. You can speak with your mortgage consultant today about the options available to you.

23
Apr
By support
Home Mortgage Tips

Should You Be Worried About Skipping Multiple Mortgage Payments? Yes, and Here’s Why

Should You Be Worried About Skipping Multiple PaymentsFrom time to time, a homeowner may struggle to make a mortgage payment on time. Most will be able to make the missing payment a week or two later when the next paycheck arrives. However, others may find themselves in a situation where they are unable to make multiple payments in a row.

If you are skipping multiple mortgage payments, you should be concerned about your financial situation. There are several important reasons why you may want to take action to improve your situation or to work out a payment arrangement with your mortgage company.

Falling Too Far Behind To Catch Up

A mortgage payment is generally among the largest expenses in a personal budget, and a considerable portion of your take-home income may be applied to a single payment each month. When you miss multiple payments, you may find that you have fallen too far behind to catch up with your payments.

This can effectively make it nearly impossible for you to improve your financial situation without taking drastic action, such as selling your home or borrowing money.

The Negative Impact On Your Credit Report

Late payments are reported to the credit bureaus as soon as the payment is at least 30 days past due. While your lender may charge you a late fee on your mortgage after the grace period expires, you still typically have extra time to make the payment that month without seeing an impact on your credit rating. However, when you have missed a second mortgage payment, your first missed payment has typically exceeded this 30-day mark. This means that you will likely see a negative impact on your credit rating.

The Potential For A Foreclosure

You are contractually obligated to make timely payments to your mortgage lender, and when you fail to do so, the lender has the legal right to begin foreclosure proceedings. This process can impact your credit rating. More than that, it can result in the loss of your home, including erasing any home equity that you have established in it.

As soon as you realize that you are unable to make a payment on a given month, you may consider reviewing financial options available to you. You may also speak with your lender about possibilities. A final option is to reach out to a mortgage professional to review refinancing options that may be available to you.

22
Apr
By support
Home Mortgage Tips

Thinking About Buying a Rental Property? 3 Reasons You’ll Want to Get a Mortgage Pre-Approval

Thinking About Buying a Rental Property? 3 Reasons You'll Want to Get a Mortgage Pre-Approval A rental property is a wonderful investment option to consider, and it can provide you with everything from considerable tax benefits to appreciation and monthly cash flow. While you may be eager to get started searching for a new rental property to invest in, a good idea is to take the initial step to get pre-approved for your mortgage.

There are several good reasons why a pre-approval is an important first step to take.

Determining What Sales Price to Consider

The mortgage rules and guidelines for an investment or non-owner occupied property are different than those for an owner occupied property. For example, a key difference is that most lenders will require you to make a larger down payment. When you get pre-approved for your mortgage, you can more easily narrow down your property choices so that you only consider those that are affordable for your budget.

Estimating Cash Flow

When you invest in a rental property, you will need to estimate the cash flow for the property to ensure that it is a good investment. This may include reviewing the monthly rents and operating expenses, and it also includes analyzing the mortgage payment. When you get pre-approved for your mortgage, you can estimate your monthly payment and determine which properties are a better investment opportunity for you and which will generate the largest profit for you.

Structuring A Stronger Offer

By getting pre-approved, your mortgage professional will provide you with a pre-approval letter. This letter can be given to a seller when you structure your offer, and essentially this will strengthen your offer and make you look like a more serious and qualified buyer. When you are in a bidding war, this letter can make a big difference in your success. Furthermore, it can streamline your mortgage process once your offer is accepted by the buyer, and it will enable you to create a more realistic closing date on your offer.

While you may be ready to jump head first into your property search, you may benefit from taking time to get pre-approved for your mortgage. This process takes very little time to do, and it will facilitate the entire process. From searching for a great property and analyzing its strength as an investment opportunity to helping you pass through the loan process, you will benefit in a number of ways. You can reach out to a mortgage professional today to begin the pre-approval process.