If you have tried to get a mortgage recently, you may be aware that one of the first things a lender or mortgage broker will do is to pull your credit report. Your FICO credit score and credit history are critical to qualifying for most loan programs. In fact, if you do not have a minimum credit score required for most loan programs, your loan request will not be considered. There typically are no exceptions made, and lenders do not want to hear stories about why your FICO score may be low or why you may otherwise be a strong borrower. At MortgageDepot, we have loan programs available that do not rely on FICO scores for pricing or for loan approval, and these may be the loan programs that you are searching for at the present time.
The Problem With Relying on FICO Scores
In some cases, a strong FICO score does indicate that a person is financially strong and fiscally responsible, but a lower FICO score does not necessarily indicate otherwise. The reality is that life situations, such as divorce, the death of a loved one, unexpected job loss and more, can all have a negative impact on a credit rating. These are rough situations that ultimately could stress your finances in a number of ways, and such events can and do happen to most people at some point. These do not mean that the person was not responsible with their finances, but it means that life has thrown a series of curve balls at the person. In some cases, a lower FICO with a very long history of delinquency can indicate fiscal irresponsibility. However, if the delinquencies are focused within a short period of time and no blemishes were present before or after, this may be a sign that the borrower is otherwise strong.
Taking a More Comprehensive Approach
Some lenders will review all aspects of your financial situation before making a decision about how to proceed with your financing request. For example, they may look at your net worth and your available liquid assets. They may also look at how much debt you are currently carrying. If you have a bankruptcy or a foreclosure, they may take a closer look at the story behind these damaging credit events, giving you a chance to explain the situation. A low FICO score in itself may not be a reason for a loan request denial. If your credit and financial situation are otherwise strong, you may still be able to get approved for a loan.
Applying for a loan when you have a lower FICO rating is rarely something that is done without stress and anxiety, but MortgageDepot can help you to take the hassle and uncertainty out of the situation. We have a no FICO score loan program available that will look at other factors related to your finances during pre qualification and underwriting. If you are interested in this loan program or in other creative and flexible financing options we offer, contact MortgageDepot today.