There are a lot of myths out there regarding mortgage loans and credit scores and how they relate to each other. If you are looking to obtain a new mortgage or refinance an existing mortgage, the following information may help you in your quest to finance the house of your dreams.
Poor Credit = No Mortgage
It is not always impossible for borrowers with poor credit to get approved for a mortgage loan. Find a lender that will agree to manually underwrite your mortgage loan. During this process, the loan officer will not only look at your credit, but they will also factor in your income and any changes in your circumstances that will make you a good risk as a borrower. It can be difficult to find a lender to do this, but they are out there.
Poor Credit = Bad Interest Rate
This is another mortgage myth. Just because you have bad credit doesn’t mean you’ll be stuck with a terrible interest rate. Many banks and licensed money lender Singapore are willing to take a chance on potential borrowers and give them a good interest rate on a mortgage loan. Shop around until you find a lender that will give you a fair deal on a mortgage loan.
Great Credit = Perfect Mortgage
Some people with great credit take it for granted that they will be instantly approved for a mortgage loan from any lender, and that this is a personal loan with a low-interest rate. This isn’t always the case. A mortgage loan is based on more than a FICO score.
The lender will look at your income, payment history and many other factors before making the decision to approve your loan and determining what interest rate they will extend to you on your loan. Don’t let your high credit score fool you into thinking you will get the perfect mortgage on your terms. Always keep striving to improve your credit file and your financial circumstances.