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Credit Concerns

Putting off buying a home because you don't think you'll qualify for a mortgage? An imperfect credit history doesn't have to get in the way of your homeownership goals.

Even if the negative entries on your credit report are accurate, you may still be able to lessen their impact on your mortgage application. Extenuating circumstances that may have contributed to missed payments, such as illness, a job loss, or other circumstances beyond your control, can be taken into account. With its extended-credit programs, for example, Pan American Mortgage can provide solutions for many borrowers whose finances don't fit traditional underwriting requirements.

You may also want to consider alternative buying opportunities or seeking gift funds — both of which may help bring homeownership within reach.

Alternative purchase options
With a little extra effort, you might be able to find a house that will meet your needs for a price you can afford. Keep the following in mind during your home search:

• Look for foreclosed properties that require little or no down payment. For do-it-yourself types only! You'll probably have to put in a lot of extra fix-it work, but you could get a good deal. Even better, lenders and government agencies often provide special financing options.
  
  
• Look for homes with hidden opportunities. Look beyond the cosmetics. Some sellers don't take the time to replace carpets or repaint the interior of their homes before putting them on the market. Because these homes may not be as visually appealing to buyers, they may not generate the same amount of interest or buyer competition as better-maintained or recently updated homes, and therefore may sell for a lower price.
  
  
• Find a motivated seller. Sometimes, all you need to get a good deal on a new home is a highly motivated seller. Some sellers must sell their homes quickly — they might be closing soon on a new home, relocating, or just unable to afford to keep their current home. So they may be more open to negotiating a good price for you.

Gift funds
If your funds for a down payment or closing costs are low, family members (such as parents, siblings, or grandparents), who are financially able and willing may be able to help.

One of the most common ways they can help is by providing you with money in the form of a "gift" you can use toward your closing costs or down payment.

In most instances, a relative of the borrower or a qualified organization must be the source of gift funds to be used toward a home purchase. To assure the lender that you aren't, in fact, just taking on an additional loan and adding potential debt, the donor signs a document stating the money is a gift that you won't be repaying.

This may be very helpful toward covering the down payment or closing costs, although, you should check your loan's requirements to make sure gift funds are permitted, and what limitations, if any, exist on how much can be contributed and how those funds can be used. Because of restrictions on how much money donors can provide as a tax-free gift, a tax advisor should be consulted.

In any case, talk to a mortgage professional
Pan American Mortgage offers a variety of financing solutions for borrowers in many different situations. A home mortgage consultant can help you assess your individual needs and talk to you about our flexible credit solutions. Remember, past credit difficulties don't necessarily mean an end to your dream of homeownership.

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