Can a Criminal Record Affect Getting a Mortgage?
If you have a criminal charge, you may have wondered if it will affect your future chances of buying a home. While having a criminal history may have an impact on whether or not you can qualify for a mortgage, it depends on the reason for your arrest and the severity of your criminal record. If you are thinking does your criminal record clear after 7 years, the answer is that record will be there but it will not show in your background search. However, you need to confirm from the authorities of your state.
Keep reading to see the ways that a criminal record can affect your chances of getting a mortgage.
First, look into your background.
Before you go on the hunt for a loan provider, you can run a background check on yourself to see what comes up. If you’re unsure of your criminal history, there are free arrest records online you can use to see if any old charges have stayed on the public record. There are different levels of offenses that you may find on your criminal record.
Infraction
An infraction is less severe than other types of crimes and usually results in a fine rather than jail time. You may get an infraction for things like traffic violations or noise complaints. If you do get one, it doesn’t mean you’ll have a criminal record. This type of offense typically doesn’t have any effect on whether or not you can get a mortgage.
Misdemeanor
Misdemeanors are more weighty than infractions but not as consequential as felonies. Things like vandalism and trespassing can earn you a misdemeanor charge. Depending on the offense, your punishment will vary but can include a year in jail and a fine. You may also have to register as a sex offender if charged with a sexual misdemeanor.
Misdemeanors can land you in jail, so you have the right to a trial. As stated on this website, your attorney will have the opportunity to reduce your charge to an infraction so you can avoid having a criminal record. Again, depending on your potential loan provider, they may not deny you a mortgage due to a misdemeanor.
Felony
Felonies are the most severe charges, and they also have the most severe consequences. You can get more than a year in jail, and the indictment will likely permanently be on your criminal record. Felonies like murder carry even more heavy punishments. Depending on the crime, your attorney may get the charge reduced to a misdemeanor.
Since felony charges are so severe, they can significantly impact your future. They can hinder your future job search, keep you from voting, and make it more challenging to purchase a home. Mortgage lenders may outright deny you due to your felony arrest record, or they may offer you unfavorable loan rates. It isn’t against the law to deny people mortgages because of their criminal history, so be aware of the possibility that it may happen to you.
There is always a possibility that a loan provider won’t disqualify you for your criminal history record. If you succeed in applying for a mortgage, you can try to use term deposits to keep your finances secure while you pay off your loan. Term deposit facilities have fixed interest rates, so your deposit won’t suffer even if your bank does.
What do potential lenders look for in applicants?
Potential lenders may look into criminal history records to check for severe convictions like violent offenses or sex offenders. Anyone can access arrest records since they are public information, and lenders can also run a background check and see other details like past bankruptcies, your credit score, or even divorce records. Different companies have different criteria for which they may decline your mortgage application.
Every lender doesn’t run background checks, so depending on who you loan from, you may not have to worry about anyone seeing your criminal history. You also try to get your offenses pardoned or expunged from your record. Consult a criminal offense attorney to see if that’s an option for you.