Even if you think your credit will prevent you from getting a loan, call me to discuss your options. There is a probably a program out there for you. Many times, I can do something to help out my customers. Your mortgage may not have as low an interest rate as someone with better credit, but we may still be able to get you into your own home.
Your Credit Score and Loan Options
If your credit score is low, we have a variety of loans to help you. Contact me so I can find the right loan for you. I am fully licensed in the state of Michigan and can work with anyone, anywhere in the state.
If we can’t find a loan to suit you, we can go over the steps necessary to improve your score. Remember, credit scores do not instantly get better. Improving them requires time and diligent effort on your part. Increasing your score just 5 points can save a significant amount of money.
Steps to Correct Michigan Poor or Bad Credit
- Obtain a free copy of your credit report and dispute mistakes or outdated items.
- Begin reducing your credit card debts as much as possible. Similarly pay off other debts like car loans or auto debts, particularly if they have more than 9 monthly installments left, since auto debts with less than 9 payments are generally excluded from debt calculations. You should target and reduce your monthly liabilities to less than 50% of your total income, in order to give confidence to the lender about your ability to repay your mortgage loan without any defaults.
- Keep your existing accounts open and active. You may be anxious to close credit accounts that have zero balances, but doing this can cause you to lose the benefits of a long-term credit history and increase your ratio of debt-to available credit.
- Keep credit inquiries to a minimum. Each inquiry into your credit history can influence your score anywhere from 2-50 points. When it comes to mortgage and auto loans, even though you’re only looking for one loan, multiple lenders may request your credit report. To compensate for this, the score counts multiple auto or mortgage inquiries in any 14-day period as just one inquiry, so try and stay within that time frame.
- Offer proof that you are financially responsible. I will go through your bank statements to figure out your expenses and incomes. Any unusual entry may raise question marks. If a friend or family member gifts you money to help you purchase your house, make sure the lender know it is a gift and not another loan. Reveal all your liquid and cash reserves that you own, since lenders judge your paying capacity from them and generally prefer that they have at least two month’s reserve of the monthly mortgage payments. Last, but not the least, even factors like prompt payment of house rents, phone bills, insurance premiums, and other financial bills add to your credit worthiness.
- Start saving big for a good size down payment on your home. Since you fall in the bad risk category for a lender, the bigger the down payment, the more it assures the lender of being able to recover his cash in the event of a future default. Do remember to include closing costs when saving for your down payment, as they can add as much as 6% to the purchase price. Overall, saving more than 20% of the total purchase price should improve your credibility.
I will probably have a loan option for you. At the very least, I can give you advice on how to improve your credit score, so we can get you a mortgage in the future.
To get started, or if you just want me to answer your questions, call me at 989.245.2230 or drop me an e-mail at firstname.lastname@example.org.
Click on the links to learn more about our Michigan mortgage loans.