You Have Options

It is possible to buy property with an average or even poor credit score. In fact, government programs including FHA and VA loans, are making home loans more accessible for the credit challenged. 

Here's what you can do if you have a low credit score and still want to own a home.

Offset credit problems with cash

Most lenders consider three things when deciding whether to approve your mortgage application: debt-to-income ratio, credit score and loan-to-value ratio, or LTV.

You might be able to offset a poor credit score with a larger down payment, thus improving the LTV. A larger down payment can also help make you more attractive to lenders, since you’ll need to borrow less money for the purchase and have more equity in the home.

Take advantage of government-backed programs

If you go outside of conventional loans, such as FHA or VA programs, your down-payment obligations shrink or disappear altogether. The VA program doesn’t always require a down payment and FHA loans require 3.5 percent. Plus, they have no minimum credit qualifications.

Understand your credit to understand your options

A key step in the home-buying process is understanding your credit. Start by contacting us so that we can guide you through this process. For people struggling with their finances, big banks might not be the way to go. They often stick with conventional products which you might not qualify for.

Knowing your financial status will give you important insights into how much you can afford, what you will pay in fees and what your interest rate might be.

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Understand your credit to understand your options

Here’s how to improve your credit score fast so that you can get the loan you need.

  1. Check for errors on your credit report
  2. Start paying on time
  3. Keep balances low
  4. Be cautious about new credit

A good credit score is above 700. Very good scores are above 740 and exceptional scores are above 800. Raising your scores after a blemish on your credit report or building credit for the first time will take patience and discipline.

Low Credit Score?

Do you have a low credit score and don’t know where to go? 

Talk to an expert at Home 1st Lending.

Let's Talk Credit.

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