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Buying A House With Bad Credit?
Buying a home is on everyone’s bucket list. Whether you want to buy a home because you finally want to settle down, or you are tired of paying rent and ready to invest in an appreciating asset, buying a house can be overwhelming.
Starting the home buying process with bad credit can make it seem nearly impossible to get a loan, but did you know there’s such a thing as a bad credit home loan? There are steps you can take before applying for a mortgage that will help improve the odds of qualifying.
While many lenders are increasing their minimum score requirements — especially big banks — there are loans available to homebuyers with credit scores as low as 500.
If you have a score lower than 500, getting a mortgage is harder. Focus instead on getting your credit score up to at least 500. With a 500 credit score, and 10% down payment, you may be eligible for an FHA mortgage. With a VA mortgage, you need no down payment with a 500 score. That’s 100% financing.
The mortgage lenders consider a bad credit score as one that is below 620. They consider a good credit score to be at least 620. Even with a higher credit score, an FHA mortgage is still a great option to check out — the rate and payment may be lower than conventional. Also the requirements may be easier, helping you qualify.
