If you want to purchase a new home but are having a hard time qualifying for a mortgage loan, all hope is not lost. You still have a few options, and though some of them may be difficult, they are all worth a try.
1. In order to qualify for a mortgage loan, you will generally need these four things: enough money for a down payment, a good credit score, a steady and reliable income, and a monthly income that is at least three times higher than your expected monthly mortgage. However, if you don’t have all four items, you can still go ahead and meet with a lender anyway. Lender requirements vary from bank to bank, so it won’t hurt to talk to several different lenders and see if one of them will be willing to give you a loan. Even if they don’t, they can at least help you understand what you need to work on financially in order to qualify in the future.
2. Use a mortgage broker. Mortgage brokers represent many different lenders, and charge a fee to shop around and find a lender who will give you a loan. The cost of paying their fee will be worth it if they manage to secure a lender who will give you a loan.
3. Get a co-signor. If a family member or very close friend with a better credit score and higher income that you is willing, you can have them co-sign a loan with you. This means that although the loan will be yours and you will be responsible for paying it, if you don’t, your co-signor will have to take over payments for you. Obviously, this involves a great deal of trust between you and your co-signor for this option to work.
4. Co-signing a loan is always risky for the co-signor because their credit will be negatively affected in case you don’t make your payments, so if your family member or close friend is wary of that option, a more attractive alternative would be to have them buy the house in their name, then rent it to you with the option to buy. Note that rent to own real estate deals may not be legal in some states, so you must consult an attorney before proceeding with this option.
If you are planning to buy a home, let The Incorvaia Team make the process as easy as possible for you. Call us at 440-879-7130 today!
