How to Look for Low Credit Score Mortgage Lenders in Houston?

Choosing a mortgage lender for applying for a home loan program is a must for you. But with so many lenders claiming to offer the best deal, finding the one whose work matches his or her words is not easy. And if your credit score is lower, the task will be more daunting.

It is because every lender does not offer home loans to borrowers with low credit. First, you have to find out low credit score mortgage lenders in Houston, Tx and then whom to choose. Here are a few tips that will help you with this –

  1. Ask about first-time homebuyer programs

Some mortgage lenders partner with state agencies in order to offer down payment assistance, rate discounts or educational resources to help first-time homebuyers with or without a low credit to purchase a home. These kinds of programs include affordable loan and grant options for public servants, veterans or those with student loans, and benefits can often be combined to make buying your first home as affordable as possible. Although state housing, as well as finance agencies, market these first-time homebuyer programs, the mortgages, are handled by lenders. Eligibility requirements can vary, so don’t forget to ask about these.

  1. Opt for lenders who offer government-backed home loans

It is the ideal option for you when your credit score is not up-to-the-mark. Government-backed loans need low credit score when compared to conventional home loan programs. Loans offered by the U.S. Department of Agriculture, the Federal Housing Administration, and U.S. Department of Veterans Affairs have relaxed credit, income, and down payment requirements for easier qualification. You can get USDA and VA loans with zero down payment, while for FHA loans the down payment requirement is as little as 3.5%, and minimum credit scores for all three are generally lower than for conventional loan programs. There are limits to how much you can borrow with a government-backed loan, and mortgage insurance – check about this. Keep this in mind that all lenders don’t offer FHA, VA or USDA home loans. So, try to find out the ones who offer these.

  1. Compare interest rates and more

Just because you are looking for low-credit home loans does not mean you will not compare interest rates and other related things. Check current interest rates online and compare it. But don’t stop here. Comparing annual percentage rates, or APRs offers a more complete picture of what you will need to pay over the life of the loan. You would also like to compare application, title, appraisal, and loan origination fees that can affect closing costs and vary widely based on the lender. Ensure you have all the facts by asking for clarification in every step. Don’t be quick to make a decision. Think and then decide.

So, ask about first-time homebuyers programs, check whether the lender offers government-backed loans or not, and compare interest rates and other things and then make the decision of choosing the lender.

Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.

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