Sound Off Andy Sach What do buyers with bad credit need to know about financing?
If you’ve purchased a home over the last decade, you know how demanding the process can be. The process has fundamentally changed since the recession and there are new guidelines lenders must follow to execute a buyer’s loan in time for closing.
There are a lot of variables to determine how much home you can afford and its best to speak to your lender directly about it. That said, over the years, I have found it imperative to talk to my clients about the difference between what they can get qualified for and what they can truly afford.
Be sure to review all of your expenses, your savings goals and the quality of life you hope to live. Often we scale back the price point of our buyer’s home searches to better meet their affordability goals and a price range that won’t stress them financially.
Let’s turn to the process of approving buyers with less than stellar credit. Poor or below desirable credit scores happen for many reasons and a bank will take all of them into consideration.
There are a lot of variables in being qualified with less than perfect credit, such as income, debts, assets and credit history. The only way to know if you will qualify is to reach out to our preferred lender who can take a deep dive into these variables.
Some mortgage lenders are able to write loans on credit scores as low as 500 if other factors check out. Don’t count yourself out of the home purchase process if you think your credit isn’t the best. I’d strongly recommend talking with a mortgage professional to learn more.
Buying a home is a big and exciting responsibility. If your credit has suffered because of poor financial decisions we find it’s best to work with a credit repair specialist and a talented mortgage lender to increase your credit score and learn sustainable financial habits that will set you for prosperity in the future.
Happy house hunting!
Andy Sachs, Team Leader,
Coldwell Banker, 203-727-8621, Andy.Sachs@coldwellbankermoves.com