Credit & Debt

Improving Credit and The Right Mortgage – A Fresh Start

By January 9, 2015December 11th, 2018No Comments

As the calendar turns from one year to the next, it’s natural to find ways to improve yourself. A lot of people talk about improving their nutritional habits, hitting the gym more regularly, getting rid of cigarettes once and for all, and improving their family relationships. With regard to money, a lot of people want to start the year by getting out of debt, saving up for that first house, and improving their overall financial outlook.

If you are thinking about buying a home or refinancing your existing loan, but your credit isn’t where banks want it to be, there’s no time like the present to make a resolution to qualify for a mortgage. How can you do this? By improving your credit score. We are here to help you find the right mortgage for your situation. After we go through a complete assessment through the application process, we will recommend the best loan product for you and your family. This article takes you through the different types of loans available for home purchases.

Home Mortgage Types

Choose right mortgage:

“A” Mortgage

This is the traditional mortgage that most people get when they go to a bank and apply. This is the most common type of mortgage that conventional lenders, such as banks and mortgage brokers, offer to their clients. In most cases, the borrower puts down between 5 and 20 percent as a down payment on the purchase and then amortizes the loan over 25 or 30 years.

“B” Mortgage

Also known as the “Alt-A” or “Alternative A” mortgage, the “B” mortgage is designed for people who are close to qualifying for an “A” mortgage but are just a little off in some of the key areas. They might have a credit score that is less than satisfactory or a few specific knocks on their credit score that are alarming the bank. Some might have a bankruptcy lurking somewhere in their past. They might be self-employed and successful but have a difficult time with income verification. Sometimes the property is the problem, as the bank doesn’t want to make a loan on a property that doesn’t appraise correctly or is unsavory in some way. Some people need the mortgage approval to come through more quickly than the “A” lender is able to deliver.

Private Mortgages

There are many individuals and organizations that invest in mortgages each year on a private basis. They realize that people are almost never going to default on their own mortgage because they do not want to lose their home. However, there are a lot of people with the means to put down anywhere between 15 and 30 percent down on the home purchase, even though they have credit problems in their past. The banks and the “B” lenders aren’t quite ready to deal with them, even though they have developed more fiscal discipline and a higher income since their days with less sensible credit habits. If this sounds like you, then a private mortgage might be the right product for you. The term usually won’t last more than a year or two, which gives you the time to restore your credit to the point where you can attract an “A” lender.

How to Improve Credit Rating

So how can you improve your credit? Amansad Financial has relationships with a number of reputable credit restoration companies, and there are several criteria on which you should insist before you sign up for their services.

1. The company should go over your TransUnion and Equifax credit reports, giving you a complete overview of your credit profile. They should also offer unlimited removal of any accounts that are fraudulent or erroneous.

2. A company that will not give you an individual consultation with a credit counselor is not worth your fee. You should also get access to tools that will help you rebuild your credit.

3. Finally, you should have access to a personalized, step-by-step plan to help you increase your credit score in a short amount of time.

Amansad Financial works with many clients that have challenges qualifying for a mortgage, and traditional “A” lenders will often not work with them. However, with the right game plan, you can find the right “B” or private loan to start you on the path to home ownership, using the shorter loan term to give you time to qualify for an “A” mortgage. Working with one of our affiliated companies that specialize in credit improvement will help you get the credit improvement you need. Reach out to one of our mortgage specialists to get the process off the ground!

Get Started Today with our Fast Pre-Qualification Form!