Buying a Home,  Credit

Can a person with a low credit score get a home loan?


It is possible to get a mortgage loan with a low credit score. Technically, FHA will accept a score as low as 500. Finding a lender to accept that score is a different story. I have limited sources who may give loans to buyers with scores as low as  530 for FHA loans, 560 for VA, and 620 for USDA and conventional loans. The lower scores also might require at least a 10% down payment. The more down payment you have, the easier it becomes to get approved.

You might also seek out lenders who do portfolio loans. These are lending institutions that will keep the loan in house and not sell it in the secondary market. They can decide for themselves if the loan makes sense and if they are willing to take the risk. Of course, the higher the risk, the higher the interest rate.

It is, however, prudent to increase your score before getting a loan. There are various things you can do to increase your score, many times in a short time. Some credit issues might take more time. You should review the reasons for your low score. In certain cases, now may not be the time to get a home loan. Many other cases, it is simply a matter of cleaning up a few things to get a healthy credit score to get the best rates and terms to increase your buying power.

If you have questions or concerns about your credit and how you might be able to increase your buying options, feel free to contact me. I will get you solid advice to help you achieve the best score in the shortest time.

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