Can I Get A Mortgage If I Have a Criminal Record?

Mortgage application with set of house keys.People make mistakes in life. Sometimes, those mistakes can make it difficult to achieve the things we want later on. Owning a home, for example, is one of the most sought-after goals for people all over the world. Sadly, it can be quite a challenge to make this dream a reality if you’ve got a troubled past.

Even some of the most successful people of our time have been faced with criminal charges at some point in their life, and yet they’ve somehow managed to secure employment, buy nice cars and homes and even build a tremendous amount of wealth. We hear reports all the time about celebrities that have gotten into trouble with the authorities, yet continue to want for nothing. But for most average Americans, bouncing back from a criminal charge isn’t so easy. 

When it comes to obtaining home financing, having a criminal background won’t necessarily disqualify you for a loan; however, it may complicate things quite a bit. Different banks have different policies, but all are required to abide by state and federal laws regarding discrimination. Any sort of discrimination based on an applicant’s…

  • Race or color
  • Religion
  • National origin
  • Sex
  • Marital status
  • Age (provided the applicant has the capacity to enter into a contract)
  • Receipt of income from any public assistance program
  • Exercise, in good faith, of any right under the Consumer Credit Protection Act

…are all direct violations of the Fair Lending Laws and Regulations. However, you will notice that criminal history is not listed, which means a lender can essentially deny your loan application based on a record of criminal activity. That’s not to say they definitely will – but if your record is substantial enough, it may be very difficult for you to present yourself as an attractive loan candidate. 

Most lenders do not conduct criminal background checks on mortgage applicants. However, they will run your credit score, verify your income and verify your residency for the past 10 years or so. If you’ve been in jail within the time frame your lender examines, your past will more than likely come up. And since lenders want to loan money to people they consider less of a financial risk, the more time you spent in jail, the less time you have establishing a solid work and savings history.

Remember, it’s extremely important that you do not lie on your mortgage application. Sometimes people think they can avoid bringing their past to light by putting down phony addresses, omitting certain information, or making up fake employers. This will not only cause you to get a firm “DENIED” stamp on your application, it could also land you in jail. Producing false information on a mortgage application is considered a type of mortgage fraud.

As a final word of advice, keep in mind that mortgage lenders base their interest rates on the level of risk for each loan. If the applicant is considered a higher risk, the interest rate will likely be higher. So if you do get approved for a mortgage, don’t be surprised to see a higher mortgage rate. The best things you can do are…

  • Be patient
  • Save up money
  • Build a record of steady employment
  • Do whatever you can to improve your credit

…and just make yourself as attractive of an applicant as possible. If you do all this, your chances of getting a mortgage are much better.

All this is not meant to completely deter you from applying for a mortgage if you have a criminal record – it’s simply to help educate you and allow you to understand how the process usually works. So, the simplest answer to “can I get a mortgage if I have a criminal record” is “yes – but it probably won’t be easy.”

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