If your credit is good but not great, consider asking a family member with excellent credit to co-sign your mortgage application. They can be taken ‘off title’ in a few years.
Today’s lenders don’t look you in the eye or call your mother before they give you a loan. All they know about you are the habits and history shown in your credit report. Lenders work on the idea that “the past suggests the future”. If you have a great credit history, then you’re probably going to reliably pay your mortgage.
If your credit shows bruising then lenders see you as higher risk and won’t be as willing to offer lower interest rates. If your credit is damaged, top lenders won’t work with you at all.
If your credit score is below a certain number then not even the most client-friendly Lenders will give you a mortgage.
Other solutions do exist – we call them Alternative Lenders. While their rates may be higher, and they will charge some fees, they (usually) allow us to make the deal work. With access to over 30 Lending institutions, we will work to get you the best deal.
Pro-Tip: If your credit is good but not great, consider asking a family member with excellent credit to co-sign your mortgage application. This family member will not need to be on your mortgage or to co-own your home forever. You can remove them in a few years.
How to preserve your good credit
- Pay your bills on or before the due date.
- Do not exceed 80% of the credit card/line of credit limit.
- Do not carry a monthly balance over 30% of the credit limit.
How to improve or repair credit
- Consolidate your loans so that your finances are steadier and you don’t miss any payments.
- Cancel credit cards with high interest rates.
- Look into pre-paid credit cards.
- Don’t take any new loans.
- Call the credit companies and ask them to remove negative marks on your credit.
Remember, when lenders ‘pull your credit’ they see a very different report than you get from Equifax or similar companies. What they see is a detailed history that reaches back several years.