Home Mortgage Rates

Home Mortgage Rates

I recently published a post about specific recommendation on improving your credit score.

But what if you credit score was less than perfect and you were looking to get pre-approved for a mortgage loan?  How would you make you loan appear less risky to the underwriters:

1) Increase Down Payment:  If you are able to increase your down payment 20 to 30% or higher,this will make your loan much more attractive when and if your bank decides to resell it.

2) Find a Co-Signer:  Identify a credit-worthy co-signer to join your loan application as  the main borrower.  This will reduce the impact of your bad credit since the loan will be underwritten with the co-Signers credit history. In this case, after about 12 months where you have documented consistent on-time payments, you should be able to refinance the mortgage and remove this person from the title and the loan.

3) Assets:  Provide all your valuable assets including Stocks, Bonds and 401k fund to help bank recognized that you have some recoverable assets in case your home mortgage falls into trouble.   This could be additional real estate which could be pledged as a collateral for this purchase.

4) Reduce your Debt Ratio:  30-35% of your credit score depends on the ratio of your credit card limit and the amount of revolving balance on that specific credit card. Reducing this limit below 30% should increase your FICO score within a few months.  Some Credit Monitoring Services offer services to help consumers monitor the activity to help you track any improvements on your credit.
You can also Contact Us to get specific recommendations based on your Full credit report.
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