Can I Get Home Buying Loans with Bad Credit?

For decades, credit scores were the only obstacle between aspiring homeowners and the properties of their dreams. However, you’ll be happy to know that you can get a home buying loan despite having a bad credit score.

Bad Credit Home Buying Loans You Can Choose From

If you’re a bad credit home buyer, there are a variety of national, state, or local programs you can pick from. Here are some options your online mortgage broker may recommend for you.

• Federal Housing Administration (FHA) Insured Loan– With this loan, first-time home buyers can enjoy a smaller down payment than conventional mortgages.

• Fannie Mae Loan – Backed by the Federal National Mortgage Association (Fannie Mae), this loan is available for borrowers with a credit score as low as 620.

• CalHFA Loan – This loan is offered by the California Housing Finance Agency to individuals with a minimum credit score of 640.

Make sure to apply for a mortgage loan pre approval before submitting your paperwork for these loans. That way, you can save time and set realistic home ownership goals.

How to Increase Your Chances of Getting a Home with Bad Credit

While it’s possible for you to get bad credit home buying loans, it can still be a challenge. So, here are some tips to help you get approved faster.

• Gain the Trust of Your Lender – Even if you chose an online mortgage broker, you need to gain the confidence of the underwriter so they can approve financing. So, make sure to submit the necessary paperwork. Also provide proof of financially responsible behavior such as timely bill payments over the span of a year.

• Save More for Your Down Payment – Borrowers with a credit score below 580 may be required to pay more for down payment. Even if your credit score is above 600, putting down between 5 to 20% will help you score a competitively low interest rate.

• Improve Your Credit Score Steadily – Even if you get pre-approved, make every effort to improve your credit score. This will help you enjoy a successful homeownership, especially of you need to apply for a home loan refinance along the line.

Resource By: https://www.prlog.org/12780567-can-get-home-buying-loans-with-bad-credit.html