- Check both your Equifax and TransUnion reports for errors first.
- Alternative and private lenders cost more, and are usually a short-term bridge.
- Two years of on-time payments can open the door to a prime lender.
1. Check your credit reports
Get your free reports from both Equifax and TransUnion and dispute any errors. Know your score, any collections or late payments, and when negative items will age off. Your agent will need this picture too.
2. Know your lender tiers
Prime lenders (banks, credit unions, monolines) offer the best rates. Insured mortgages generally need a minimum score around 600. Alternative (B) lenders accept lower scores or past issues, and private lenders focus mostly on the property’s equity.
3. Understand the costs
Alternative lenders typically need a larger down payment, often 20%, and may charge a lender fee. Private mortgages are usually 1-year terms with higher rates and fees. Know your total cost, not just the rate.
4. Build your plan back to prime
Pay every bill on time, keep credit card balances well below their limits and avoid new debt. Many borrowers can move to a prime lender at renewal after one to two years of clean history.
5. Work with an agent early
An independent agent can tell you which lenders will consider your file today and what to fix to qualify for better rates later. The sooner you start, the more options you’ll have.
This guide is general information, not financial advice. Rules and programs change; an independent, licensed mortgage agent can confirm what applies to you.