A low credit score or other credit problems doesn’t mean you cannot own a home. We have a variety of bad credit home loan options available in the present market. The main requirement for approval is your income and down payment for many of these bad credit home loan programs. A low credit score, prior bankruptcy or other credit issues will not prevent you from qualifying for these bad credit home loan solutions that are now available.
Most real estate lenders focus on four items to approve you for a home or other real estate loan; these items directly impact your approval for a bad credit home loan:
1. Income or Employment and Length of Employment
2. Credit Score and Credit History
3. Assets (Checking, Savings and Other Assets)
4. Down Payment Amount
Your credit history and credit score are factors however a damaged credit rating can be offset with your income and down payment. A larger down payment and/or larger income can easily help you to overcome a low credit score.
Some of the bad credit home loan options available include FHA and VA Loans, Conventional Mortgages and Non-Conventional Direct Lending. There are other direct lender options created for those with damaged credit.
FHA and VA Loans are often used for those seeking a bad credit home loan. These loan programs accept very low credit scores and they offer highly competitive interest rates.
If you cannot find a bad credit home loan another solution is to try looking for a property owner or investor that is willing to work with you in an owner-financed transaction. Owner financing can be a great solution while you improve your credit rating.