It is no secret that with a bad record or credibility, it is very difficult to establish a good standing in society. And the longer your record gets, the less chance you will have to get things like a loan. But it is not impossible.
Being in possession of a criminal record is a huge disadvantage in many aspects of life. After all, in the eyes of the law, it is possible for the felon to do any harmful deeds.
But can a felon get a mortgage loan? Or are mortgage lenders willing to look past criminal records and grant a felon a home loan?
Today, we will share with you whether or not a felon can get a mortgage loan.
Can a Felon Get a Mortgage Loan?
Yes, it is possible for felons to get approved for a home loan despite having a criminal record. Most home loan lenders do not necessarily require a criminal background check to get approved for a mortgage.
Thus, a criminal record may only minimally affect your application for a home loan, or potentially not at all. But of course, it is not the same for all home loan lenders, and requirements may vary case by case.
Difficulties in Obtaining Loans for Felons
Mortgage lenders usually check a felon’s financial status and capabilities before approving them for home loans. In this regard, a good credit score is a huge advantage if you are a felon trying to get a home loan.
What are the Required Documents?
Felons are often asked to present these documents to be considered for a home loan (which are the same documents everyone has to submit when they apply for a mortgage):
- Income tax returns for the past 2 years
- W-2 forms for the past 2 years
- Bank statements for few months
- Proof of mortgage for the last year along with rent receipts
- List of debts including credit cards, student loans, auto loans, and alumni
- List of all assets with bank statements, real estate details, investment details, and auto details
However, most bank and private lenders only seek these 4 requirements:
- Credit score
- Consistency with the employer
- Your ability to pay back the loan
To increase one’s chances of being approved, we recommend that the felon not change jobs or make any large purchases soon before (or while) applying for a mortgage. Also, it is important to understand that having a criminal record can poorly affect your credit record.
As formerly mentioned, not all lenders will check your criminal records. However, it is not against the law for private or bank lenders to check or deny felons of a mortgage. Lenders may also charge higher interest rates for felons to ensure financial protection on their part.
Who are the Best Mortgage Lenders for Felons?
The best government-sponsored mortgage lenders for felons are the FHA and the USDA. That is because they do not necessarily do background checks for felons with a criminal history.
And they may only do background checks for felons depending on their credit history and credit score.
In conclusion, although there are additional challenges for felons, it is not altogether impossible to obtain a house loan by any means. We hope this article provided you with insight and helpful tips.