Translate:

EN

Home Loans for Bad Credit

Home Loans for Bad Credit


Home Loans for Bad Credit

While it’s true that getting a home loan is harder when credit scores dip below established standards, it’s certainly not impossible. In fact, some programs and lenders go out of their way to help struggling would-be buyers obtain a home of their own. Buying that house of your dreams will take work and dedication on your part, along with some tips and tricks on how to prevail. Here’s a look at home loans for bad credit and how to end up with “keys in hand.”

Credit Scores and Why They Matter

When beginning the homebuying process, you’ll discover quickly that credit scores matter – a lot. But credit challenges can happen to anyone due to unexpected life changes, a handful of missed payments, or even just using your credit cards to the maximum available credit.

When it all gets tossed into the credit-score equation, you may fail to qualify for the home you want, or you could end up with higher interest rates and higher monthly payments.

Major credit events such as foreclosures, bankruptcies, tax liens and collection accounts can lower your score significantly, so you may have to wait until some time has passed between these events and your mortgage application. Depending on the loan program and the type of credit issue, this time period can be anywhere from 12 months to two or four years.

Loan Programs for Those With Lower Credit Scores

Though negative credit marks typically stay on your record for seven years (or up to 10 years for bankruptcies), they won’t necessarily keep you from getting a mortgage loan. Government or government-sponsored loans can get you into your own home with much lower scores and down payments than “standard” lenders.

These programs come from lenders associated with, or approved by, the Federal Housing Administration (FHA), Veteran’s Administration (VA), U.S. Department of Agriculture (USDA), Freddie Mac and Fanny Mae.

USDA loans for purchasing a home in a rural area allow scores as low as 581 for some buyers and 640 for others. Be sure to ask about these and other programs catering to credit-challenged buyers.

Improve Your Chances With These Simple Steps

Missed payments aren’t the only things that lower your scores – and fortunately, you can take proactive steps in other areas. Double up your savings efforts, since a larger down payment shows the lender that you have more “skin in the game.” Consider asking a family member to help bolster your down payment with gift money (not a loan, which would count against you). Keep a close eye on your credit report and immediately dispute inaccuracies.

If you have any missed payments on your record, make consistent on-time payments for at least six months. A major consideration in mortgage approval is your debt-to-income ratio (DTI), so focus on paying off debt and getting your DTI down to at least 43 percent.

To finally become a happy homeowner, keep your focus on knowledge, dedication, and persistence. Contact us today for more information and to start your journey toward homeownership.

 

 

Share

Leave a comment

Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at migonline.com Legal Information.

MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:

  • Rates are subject to change at any time.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Payments will vary based on program selection, current rates, property location, etc.
  • Not all programs are available in all states.
  • Some loan programs may not be available to first time home buyers.
  • Terms and conditions apply, which may include restrictions or limits per loan program.
  • Information is generally based on primary residence occupancy with no cash out when refinancing.
  • Unless otherwise stated, terms shown are estimates based in part on credit score of 700 or higher; owner occupancy, escrow account is established for taxes and insurance(s); debt-to-income ratio no higher than 43.0%; PMI applies to conventional loan programs over 80.0% LTV; VA,FHA & RD require insuring fees included in loan and/or payment; fixed rate, 30 year term.

An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020