The answer to your question depends on if the broken lease appears as a claim on your credit report. In the past, leases typically did not appear on your credit report but over the past couple of years more landlords are working with the credit bureaus to have lease information, including payment history, added to your credit report. This is usually at the request of the tenant or borrower because on-time lease payments help establish a positive credit history. In your case, if the broken lease information or claim is included on your credit report it could negatively impact your ability to qualify for a mortgage.
Your first step should be to determine if the broken lease is included on your credit report. You can review your credit report for free on websites like CreditKarma.com, Credit.com or AnnualCreditReport.com and we also provide a detailed explanation of your credit score and the mortgage process on FREEandCLEAR.
If the broken lease claim does not appear on your credit report then you should be in the clear on this point. If the lease claim does appear on your credit report this may present a challenge but there are several steps you can take to address it. In many cases if can be helpful to provide lenders with a written explanation of the reasons you broke the lease including any extenuating circumstances such as a job loss or transfer or medical hardship. Additionally, some lenders may require you to pay-off the lease claim before your mortgage application is approved. This is not always the case; however, depending on the circumstances that led you to break the lease.
After you review your credit report we recommend that you contact multiple lenders to understand how they would handle your unique situation. You can review lenders in your area by clicking INTEREST RATES We advise you to contact at least four lenders as mortgage qualification guidelines can vary. Plus, comparing lenders is the best way to save money on your mortgage.