When the housing market crumbled in 2008, many people with low to no credit falsely believed that homeownership was beyond their reach. Now that current mortgage rates are at an (almost) all-time low, there is no better time for a first-time buyer, or someone with a lousy credit history, to start to look into buying a property. A person with a credit score of at least 650 can qualify for a standard loan, but what if your credit falls below that line? You still have a number of options when approaching this large, life-changing purchase.
One option to look into is an FHA loan. FHA stands for Federal Housing Administration, and is backed by the Department of Housing and Urban Development (HUD). Most first-time buyers or new homeowners can benefit from an FHA home mortgage, which allows the borrower to put at little as 3% in as a down payment, and finance closing costs. It’s especially great for people with credit scores as low as 580. If yours is even lower, it’s still possible to get approved for an FHA loan, granted that you pay 10% as a down payment, rather than 3%. The FHA is the largest home loan insurer in the world, constituting 30% of the home loans currently being utilized.
The number one place to start when you are ready to make a down payment on your FHA or other loan, though, is with a low credit score mortgage lender or broker. The difference between the two is that a mortgage lender directly lends you the money you need, while a broker acts as an intermediary between the buyer and a number of prospective lenders to help their client find the right rate for their credit and income situation. The latter can be a great option for a first-time buyer, as loans and mortgages can be tricky to navigate. To best understand your options and see what rates are out there for you, reach out to a knowledgeable mortgage broker, who will work hard to find you the best deal in home loan.
With a large presence in Oxnard, Thousand Oaks, Westlake Village and Simi Valley we can help a large number of first time home buyers get into the home of their dreams. If you are looking to refinance with a low credit score reach out to us as we will be able to help.
For more information, contact Mark Ventrone, at ABLEnding.