Try These 4 Tips for Buying a House With 580 Credit Score in Houston
Do not worry if you are suffering from a low credit score. When traditional mortgages have failed to fulfil your life-long dream, an FHA loan can save the day. Even if your credit score is as poor as 580, you may be able to purchase a new home.
Lenders will now accept borrowers with less-than-perfect credit histories.As long as they have a steady income and meet other criteria of getting the loan, borrowers can dream of buying a house with 580 credit score in Houston.
Following are the points to remember:
- Make a down payment of more than 3.5%
The best thing of getting a bad-credit mortgage is that you get a benefit of 3.5%. When you put down a 3.5% or a 10% down payment, private mortgage insurance is included. The lenders provide flexible PMI options to the borrowers. When you present a lender with a low credit score, your case will be listed as compensating factors, which tend to even out the credit score dents. Since the creditors are still working hard to avoid eviction, a large down payment is another compensating factor. Remember that the less money you put down up front, the more you’ll pay in interest over the life of the loan.
- Choose FHA 203 (K) Improvement Loan
This is a form of FHA loan in which the cost of specific renovations and repairs is factored into the mortgage. You may use the loan program to fund home improvements and purchases. When you’re strapped for cash and can’t afford a big down payment, the mortgage can be a lifesaver.
- Search for FHA-approved lenders
It is known that the FHA mortgage is known for having as little as a 3.5% down payment for borrowers with credit scores of 580. The mortgage has grown in popularity among borrowers due to the lenient credit score criteria. When your credit score is below 620, traditional mortgage lenders will not accept your application. Only an FHA-approved lender who is able to originate, support, close, underwrite, keep, and buy an FHA-insured mortgage may be the best option for you.
While applying for an FHA loan, do remember these tricks and for any further information, do not forget to take professional help.