Does a poor credit history preclude obtaining a mortgage loan?

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“Does a poor credit history preclude obtaining a mortgage loan?”  A poor credit history, while unfortunate, does not eliminate obtaining a mortgage loan.  What it does impact is the rate that you are going to pay,  and the amount of equity that you will have to have in the property.   A few credit blemishes will raise your interest rate about 2.5 points over the current rate (if rates are currently 8.25%, then you could expect to have  your interest rate in the 10.75% range).   If,  however, your credit is severely blemished, then you could expect another 2-4 points added to your interest rate, giving you an expected rate of 12.5 to 14.5%.  However, you can be better prepared if you get a copy of your credit report to review before you apply for your mortgage.  That way  if there are any errors you can take steps to correct them before you make your application.  If you have had credit problems, be prepared to discuss them honestly with your mortgage lender and come to your application meeting with a written explanation.  Responsible mortgage lenders know there can be legitimate reasons for credit problems, such as unemployment, illness or other financial difficulties.  If you had a problem that's been corrected, and your payments have been on time, your credit will probably be considered satisfactory.  Also what you interpret to be a credit challenge and what lending institutions consider derogatory may be two completely different interpretations.

The loan professional that has made this information available to you specializes in assisting those individuals with less than perfect credit.  Whether it's a matter of negotiating with your creditors or simply including as letter of explanation,  your loan professional in most cases can advice you on the best approach and help you get the house of your dreams!