Right now, in Michigan and across the country, it seems like everyone is buying a home. It is definitely a “seller’s market” in the mitten, and houses are going like hotcakes. Typically, most potential home buyers believe that they need a great credit history along with a 20% down payment in order to get a mortgage. However, Michigan consumers with less than perfect credit scores and smaller down payments can still get approved for home financing. They just have to minimize their weaknesses and play up their strengths when applying for loans.
Before Assuming the Worst, Michigan Home Buyers Should Know About the Different Levels of Bad Credit
Even though it is best to have a credit score in the 700-850 range when financing a home in Michigan, buyers with lower credit scores can get mortgage approval. Even those with credit scores ranging from 620-700 may qualify for conventional loans if they work with the right lender. Also, many Michigan residents who don’t meet requirements for conventional loans can get Federal Housing Administration (FHA) loans. In fact, home seekers with credit scores as low as 580 can get FHA loan approval.
Bad credit homebuyers in Michigan should look carefully at their credit reports before seeking loan approval. This is because some types of bad credit are weighted differently than others by lenders. For example, recent foreclosures, short sales, and bankruptcies can wreck your chances. Yet, some lenders may overlook late payments, charge-offs, and past-due medical debts, especially if you can explain why they happened.
Michigan consumers should also understand that not all lenders are alike. Just because one lender rejects your home loan application doesn’t mean that you’ll get a flat “no” from everyone. Also, multiple credit checks for a single purpose only count as one hard inquiry if made within a certain timeframe. So, you won’t unnecessarily harm your credit score by shopping different lenders.
Finally, if you had an extenuating circumstance like a job loss or extended illness that explains certain blemishes on your credit reports, get ready to offer proof. Gather up any documents that you have (unemployment check stubs, hospital bills), and use them as evidence. Most lenders will at least listen to your side of the story before making a final decision about your application.
Another Reason Why Michigan Consumers with Bad Credit Should Check their Credit Reports Before Looking for Home Financing
While checking their credit reports, many Michigan consumers are surprised to find that errors – often, several – are bringing down their credit scores. The truth is that creditors, and the credit bureaus, frequently mishandle consumer information. Then, they make mistakes that result in credit report inaccuracies.
Obviously, when applying for home loans, you don’t want anything on your credit reports that lowers your credit score or reduces your chances at approval. Luckily, the Fair Credit Reporting Act (FCRA) entitles Michigan consumers to accurate credit reports. So, you have the right to dispute credit report errors and demand their removal.
Just go to www.annualcreditreport.com, and request free copies of your credit reports from TransUnion, Experian, and Equifax. The Fair and Accurate Credit Transactions Act (FACTA) permits you to do this once every 12 months. Also, make sure to check your credit reports well in advance of filling out loan applications. It takes some time to successfully dispute credit report errors, and you can’t get mortgage approval if you have open disputes on your credit reports.
Speaking of credit report disputes, you don’t have to handle these on your own. Instead, all Michigan consumers with credit report issues should contact Credit Repair Lawyers of America in Michigan. When you call our firm, an experienced credit attorney will fix your credit issues and get you clean credit reports – for free.
Or, if you have open disputes on your credit reports preventing your mortgage approval, we can help. Even if creditors are uncooperative, we’ll do whatever it takes to get you moving forward again with your home buying process. This service, like all of the services we offer our Michigan clients, will cost you nothing out of pocket.
The Free and Legal way to Get Better Credit in Michigan
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America in Michigan, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (248) 353-2882 or contact us on our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/michigan/credit-repair/.