Mortgage brokers have the ability to locate the perfect home loan for your credit type. Before lenders began offering a range of home loans, getting approved for a mortgage loan with poor credit was impossible.
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Today, there are many loans and lenders that focus on both good and bad credit mortgage loans.
Options Available to Homebuyers with Good Credit
Naturally, having a high credit score will present better mortgage loan options. For starters, if your credit score is above 680, you are considered a prime borrower. This status allows you to apply with any mortgage company and receive the best rates.
Furthermore, those with good credit may qualify for zero money down home loans up to 107%. This financing option is perfect for homebuyers who seek assistance with down payment and closing costs. Moreover, real estate investors may take advantage of 107% financing in order to have enough funds to make improvements to the property.
Individuals with good credit may also qualify for a no documentation loan or a stated income loan. Both options are ideal for the self-employed or income that’s difficult to verify.
Poor Credit Loan Option
If you have poor credit, your loan options for a mortgage are also great. Lenders realize that excellent credit is hard to maintain. Bad credit happens for many reasons, and can affect good people. For example, loss of employment or serious illness may create a financial burden. In this instance, it becomes difficult to maintain regular payments.
The majority of mortgage lenders and brokers believe in second chances, thus they offer several loan programs that cater to low credit scores. This include 100% financing loans, no money down home loans, VA homes loans, low income home loans, etc.
How to Apply for a Mortgage Loan
If new to the home buying process, mortgage lenders and brokers will assist you with the application. Before completing and submitting a mortgage application for approval, request multiple quotes from different lenders. If using a broker, multiple offers are automatic.
There are several benefits to obtaining several mortgage quotes. Lenders offer different rates and terms. By acquiring several offers, you can compare varying loan packages and select the finance option with the lowest mortgage rates.