Buying a Home with Bad Credit > Knowing Your Options
In this series of posts, we’ve explored how potential buyers with less than perfect credit can still achieve their dream of owning a home. While a high credit score is ideal in this circumstance, we know that life happens. Understanding your credit score and how it’s comprised is the first step, and now it’s time to focus on how to get a home loan through specialized programs and research. When you land your perfect first home, protect your investment with an Indianapolis Home Insurance policy.
You don’t have to achieve perfect credit.
Lenders in 2014 were approving more loans with lower credit scores. According to mortgage software provider Ellie Mae, 33 percent of closed loans in spring 2014 were for borrowers with a credit score below 700, compared with 27 percent a year earlier, says Bankrate.
As we mentioned in our previous blog, there are specialized programs for borrowers with poor credit scores. These are typically provided by the Federal Housing Administration (FHA).
Qualifying for a low score mortgage.
Approvals are automated, but if your application is rejected, you’re not out of luck. In fact, a home loan provider can manually go through your application to determine why it was denied. If you have other favorable terms, such as no late payments for a year and 6 months worth of cash reserves in the bank, you could turn that denial into an approval.
Why does my credit score vary?
Varying credit scores are common as some lenders use different sources to gather their data. If you want the most accurate number, consult with all three major credit reporting companies. Remember, the more knowledge you have, the better your chances are to prepare and earn a mortgage approval.
About Walker & Associates
Your home is where your heart is, and we understand that taking the right steps toward protecting your investment provides the necessary peace of mind. For the insurance aspect of house hunt, contact us online at Walker & Associates Insurance, or by phone at (800) 213-7126.