Have less-than-optimal credit? That doesn't necessarily mean you have to put your dreams of homeownership on pause.
There are several factors that mortgage lenders consider when you apply for a loan, and there are even options available specifically for those with poor credit. Read on to learn more about buying a home with low credit.
To determine if you qualify for a loan and at what interest rate, lenders look at your score from the three primary credit bureaus (Equifax®, Experian™, and TransUnion®) using FICO®, which compiles the scores from all three agencies to assign an overall credit score. The score will range from 300 – 850 and are based on factors like:
When it comes to qualifying for a mortgage, 620 and below is considered a low credit.
While it may not be easy to get a home loan with a score under 620, it's possible. FHA loans and VA loans are two of the most popular mortgage programs for struggling credit.
The Federal Housing Administration (FHA) offers government-insured loans with more lax credit qualifying guidelines.
Additional perks of FHA loans are lower down payments and, often, favorable interest rates. Plus, if you have a median score of 580+, your down payment can be as low as 3.5%!
If you're a veteran or currently serving in the military, you could qualify for a VA loan from the Department of Veterans Affairs. There isn't a standard minimum required credit score for a VA loan, although some lenders will set their own minimum.
Also, there's no down payment required with a VA loan nor necessary mortgage insurance (unlike an FHA loan). Although credit score qualifications are more lenient with VA loans, you'll still need to be:
Here are some pros and cons that can help you decide.
There are essential market factors that you should consider, namely, the current low rates.
Another thing to consider is that rent tends to rise faster than mortgage payments do, and depending on your location, this could push you out of your desired location if you stick with renting.
There's also the benefit of home equity and satisfaction of being able to create your living space (whether by decor or remodel) as you like. Having a permanent place to call home is also a joyful accomplishment.
Here are the cons to buying a home with less-than-stellar credit:
Many falsely believe that buying a home with low credit is impossible or a poor decision, but neither is true. Several factors affect getting a home loan, and you may be pleasantly surprised at how perfect this time may be for you to buy your first home. Contact us today for personalized assistance.
We've been helping customers afford the home of their dreams for many years, and we love what we do.
8084 W Sahara Ave. #A
Las Vegas, Nevada 89117
Dara Capital Group strives to ensure that its services are accessible to people with disabilities. Dara Capital Group has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
Dara Capital Group makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows daracap.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
Dara Capital Group accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
Dara Capital Group continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on Dara Capital Group website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on Dara Capital Group website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: email@example.com