Posted: 31 Dec '17

How Millennials Can Get Their Mortgage Pre-Approved with Bad Credit

Many first-time homeowners assume that getting a mortgage pre-approval with bad credit is impossible. While having a blemished credit history can certainly make purchasing a home more challenging, there are a few steps you can take to improve your chances of getting pre-approved a home loan. Here are a few tips for obtaining financing -- even if you have poor credit.

Plan Ahead

The best thing you can do to improve your odds of getting a mortgage pre-approval with bad credit is to plan ahead. Purchasing a home is a complex process with many steps, and obtaining pre-approval is one of the most important steps you'll take. A mortgage broker can help you get started with gathering the information and documents that you'll need to present to lenders to apply for financing.

Review Your Credit History

Your mortgage broker can help you review your credit history and identify the specific challenges you face in getting pre-approved. Depending on your financial situation, you may need to pay off delinquent credit accounts, reduce current debt, or establish at least one year of good credit. In many cases, a borrower will only need to resolve a few negative issues on their credit report to qualify for mortgage financing. By reviewing your credit report with your mortgage broker, you can develop a plan for getting a mortgage pre-approval with bad credit.

Fix Credit Report Errors

Did you know that an estimated 10 to 20 percent of credit reports contain some kind of error? Before seeking mortgage pre-approval with bad credit, it's important to go over your credit report in detail to ensure that the information you give to lenders is accurate. A small mistake in your credit history could mean the difference between obtaining mortgage financing or not.

Having poor credit can make getting pre-approved for mortgage financing difficult, but with a little planning and preparation, it can be done. Contact us today for more information about obtaining a mortgage pre-approval with bad credit.

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