Buying a home is a large financial commitment.  Often times the buyers credit score affects their ability to obtain a mortgage especially when their FICO scores are below 620.  What is an individual who is looking to purchase a home do to ensure that even with less than perfect credit do to obtain a mortgage?

One thing that is helping individuals with a poor credit score obtain a mortgage is that FICO scores are putting less weight on medical bill collections.  Medical bills actually account for more than half of all unpaid collections on consumers’ credit reports.  Below are a few things to consider when getting a mortgage with a FICO score of 620 or below.

Get Ready To Shell Out A Bit More:  Individuals looking to acquire a mortgage with less than perfect credit they should expect that they will pay more than those with credit scores on margin or better.  If you have gone through a short sale it is advisable to wait at least two years before trying to obtain a new home loan.

Recognize That You Will Want To Refinance ASAP:  A buyer that obtains a mortgage with imperfect credit should look to refinance in two years once they have improved their credit score.  A mortgage with bad credit is only a short term solution that gets buyers into a home.  Never allow bad credit to follow you any longer than it needs to.  Refinancing to a lower interest rate as credit scores increase is a way to ensure that doesn’t happen.

Speak With A Mortgage Broker Regarding Your Options:  There are many different options in regards to obtaining a mortgage.  A popular option is a thirty year mortgage; this however may not be the best option with a low credit rating.  Check with a mortgage broker to look at other options such as an adjustable rate mortgage.  This is one way to borrow money for a home loan while helping to repair and maintain a better credit score.  Often times an adjustable interest rate is lower than a fixed mortgage rate, at least in the short term.

Seek Out A Co-Signer:  If a borrower has other assets, they may be able to secure a better mortgage interest rate when securing a home loan with a co-signer.  Check with the Federal Housing Administration about having a co-signer on the loan.  When damaged credit is involved it is particularly important to check with HUD, FHA, the FHFA, Fannie Mae and Freddie Mac to help along the way to homeownership even with poor credit.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at