How much less than perfect MAY help determine the rate, but also might not, as there are programs available to lend to a wide range of borrowers without the credit being as strong of a determining factor.
Lenders will typically look at credit, income, assets, and the property type to help build the overall scenario of your ability as a borrower. That info will all help determine if: A) you are eligible for a home mortgage, and, B) what your rate will be on the loan.
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The short answer is yes. The bigger answer is how 'less than perfect' is it?
When we as lenders look at the borrower - we look at 4 things -- credit, income, assets, and the type of property they are looking to buy.
Thinking like the legs of a table - if all are strong.. then we have a good solid table.
If three strong legs - -then we have a tripod -- still ok and sturdy
If we have 2 or 1 -- we dont have a table (or a leg to stand on.. sorry.. had to include that)-- and therefore no loan.
If the credit leg is a bit beat -- then we can still do the loan -- if they have 3 other parts that are strong.. good down payment, a single family that they are going to live in, and a good job -- then they are likely able to get a loan.
However -- it does depend on how bad the scores are.. if they are iffy.. some old lates on credit cards -- possibly an OLD collection.. still may be ok. But, if there was a recent bankruptcy, repo, or foreclosure -- then you still need to heal that debt before they can move ahead.. those are biggies.. Typically have to wait 2 or 3 years if they are big issues like those are involved.
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