Overcoming Credit Related Home Loan Pre-Approval Hurdles
From pre-approval to the search for the right house, buying a home can be a daunting task. If you’re a first-time homebuyer, it’s easy to become lost in the details and the paperwork. An even worse scenario – you may not qualify as the “ideal” borrower based on certain characteristics. After the housing crash in 2008, mortgage lenders have tightened their restrictions and their belts in who will and who won’t qualify for a home loan. However, even if you have some dings in your credit history, all is not lost.
While a qualified loan officer can help guide you through the process of obtaining a pre-approval for a home loan and the accompanying paperwork to overcome any credit issues, it is best to walk into the home buying process with an understanding of your credit standing and any issues that may hinder approval. Before pre-approval, it’s best to check your own credit score and work from there. If your score is low, you will want to do further research and see why. Outside of a low credit score, there are other issues that can get in the way of pre-approval (bankruptcy, foreclosure, etc.).
Our Team often takes on a variety of cases when it comes to pre-approval, we are offering an informative blog series that will cover useful tips on how to get your credit in order, before starting the home buying process. We will discuss the three common pre-approval issues of low to moderate credit, bankruptcy, and foreclosure, while providing tips and options for those who are struggling with these concerns.
It’s important to keep in mind that whether you’re struggling with credit problems, loan approval is still possible. When it comes to battling a low credit score, many people start with correcting errors in their credit report. Another option is to focus on upgrading your credit profile. This can be done through paying down debt, setting up automatic payments so you don’t fall behind, or looking into non-conventional loans with less stringent lending requirements.
While foreclosures or bankruptcy may seem like impossible hurdles to traverse, there are also options available for these situations. Bankruptcy may require a waiting period before applying for pre-approval or taking on a mortgage, but with either route it’s still possible to buy a home. When it comes to foreclosure, the path might be a little thicker, but there is always the option to wait out the damage of a foreclosure while rebuilding your credit profile. You can also contest the conditions that led to your home being foreclosed in the first place (in the event of extenuating circumstances).
No matter what your situation, when looking to obtain a pre-approval for a home loan, it’s important to work with a skilled loan officer who will take the time to walk through the process and offer answers to your questions. If you’re dealing with any of these issues, feel free to contact our Housing Buzz Team today or check back for more tips and guidance on how to obtain pre-approval.
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