How to Get a Home Loan with Bad Credit
Financing a home with low credit scores can get tricky if you don't connect with the right mortgage lender that has vast experience closing subprime home loans. As the lenders across the country have tightened their guidelines it is important to know how to get approved for a home loan with bad credit. Just a few years ago, almost anyone could get a mortgage with bad credit, because lenders and brokers were approving almost every loan application. Borrowers needed very little, if any money for a down-payment and low credit scores were not a problem. Our associate lenders understand the difficulty of qualifying for a home loan with bad credit so you can expect extra attention than you would get from most finance companies. Our lending mission is to help consumers get approved on a home loan for people with bad credit by finding the strengths in a borrower beyond their fico score.
Our Lenders Believe There Is More to You Than a Credit Score
First time home buyers with bad credit are encouraged to submit loan applications, as several of our financing sources are being more aggressive this year with purchase money. Things may have changed for the better as now in most cases, people with bad credit qualify for a home loan with great rates and terms. Gone are the days of paying more in points and fees when taking out a bad credit home loan.
Learn the Key Factors in Qualifying for a Home Loan with Bad Credit Scores
As the foreclosures increased nationwide, it was inevitable that lenders would start requiring higher down-payments and better credit scores for people looking to become homeowners. Talk to finance agents that take the time to uncover compensating factors that you may have that help persuade the underwriters to approve a home loan even though you have bad credit scores. We know that buying a home can be a stressful time, so we go to great lengths to simplify the process and ease the pain of financing. Qualifying for a bad credit home loan with no money down can be extremely challenging so make sure you are speaking with lenders that offer these high risk house buying loans for all types of credit.
Government Home Loans for Bad Credit: As most of the bad credit lenders closed their doors, the last few opportunities for people with bad credit to get a home loan was through government lending programs like VA and FHA. Our team will try and connect you with some of the last few bad credit lenders who continue to offer VA and FHA mortgage loans for people with all types of credit.
- FHA home loans and refinancing to borrowers with credit scores of 500 or better
- VA home buying and refinancing with no minimum credit score requirements
- USDA offers home loans with no down-payment and bad credit for rural regions
- Learn How to Buy a Home with a Low Rate Government Mortgage, regardless of credit history (borrowers must meet lending criteria)
- Fannie Mae offers a unique Path to Home Ownership
- First time home buyer loans from Freddie Mac
- Explore New Home Financing for People with Bad Credit
- Learn How to Get a Home Loan Bad Credit with Low Fico Scores
- Private Lenders offer high risk mortgages in most states
- Bad Credit Home Loan Programs After a Bankruptcy or Foreclosure
- Down-Payment Assistance for People with Poor Credit or Low Income
- Loans for 2nd Homes, Mixed Use, Rural and Investment Properties
How to Shop Home Mortgage Loans for Poor Credit
The housing market has made a slow but steady recovery over the last several years, and so has the economy in general. But the scars of the economic downturn are still everywhere, and many Americans have found themselves with bad credit as a result of the past. It's easy to feel like poor credit has made it impossible to qualify for a loan, but the truth is that there are numerous home loans for poor credit holders and that in many instances they could be easier to qualify than you may think. It's even possible to refinance with a low credit score.
The first option many people look at when trying to find a home mortgage loan with bad credit is typically the "subprime mortgage". This type of financing is structured very similarly to standard mortgages, but often come with higher interest rates than others. The reason for this is that subprime mortgage lenders are taking on a larger amount of risk by lending money to someone with poor credit than they would with a borrower with good credit. That risk is offset by higher interest rates. The important thing to look into when considering a subprime loan is the terms and penalties. Things like adjustable rates and balloon payments can be hard to deal with if you're not expecting them, so always read the fine print.
Another option is to look at FHA home mortgages for bad credit holders. FHA loans are backed by the federal government and as a result will offer less restrictive credit rating limits than standard loans. In these loans, the primary focus will be employment history, debt to income ratio, and possession of a down payment. These loans usually have better terms than subprime mortgages and offer a much better path to home ownership than other options – especially for first time home buyers.
Find Out What is Required to Buy or Refinance with Home Loans for People with Bad Credit Ratings
There are a few steps to take when you're in the market for a home and know that you have bad credit. Keeping them in mind will help ensure that you get the right kind of results when you start applying for your loan.
- Work on your credit. Yes, there are poor credit home mortgage loans out there, but the better your credit the better your options will be. It's always a good idea to work on your credit score.
- Keep your job. With bad credit home mortgage loans one of the primary things that lenders look at is employment history. The longer you've been employed in one place, the better off your chances of securing a loan will be.
- Avoid unneeded debt. Lenders also look at your current level of debt and your current income. Too much debt may mean that you can't qualify for the loan you want, so be sure to think carefully before taking out loans that you don't really need.
- Find a lender you can trust. There are plenty of lenders out there, and you should always spend a few minutes making sure that you find one you can trust to treat you fairly, give you honest answers to your questions, and secure the best loan for you – not for their bottom line.