One of the top reasons stopping people from attempting to purchase a home is the fear their credit history or credit score won’t be good enough to get them qualified for a home mortgage loan. While this may be true with some loan programs, there are several other mortgage loan options available which accept less than favorable credit scores or marks on your credit history.
Credit scores are essentially a grade given to an individual that estimates the likelihood they will repay a debt on time. The “grade” or score can range from 300-850. There are many factors that can affect this score negatively or positively, and a score below “Good” may require mortgage loan applicants to put more money down or have a higher interest rate.
Overall, the ranking for scores is as follows:
BlueGrey Mortgage is dedicated to help clients get the home they’ve always wanted. That’s why we provide such an extensive list of mortgage loan program options and do what we can to work with individuals who have damaged credit.
Each of the below mortgage loan options are available to borrowers with a credit score under the FICO ranking of “Good”. In addition, these programs also forgive negative aspects of your credit history, like a foreclosure or bankruptcy if it occurred 3 or more years prior to your mortgage application.
Here is a list of mortgage options available that we can help you get pre-qualified for:
One of the most commonly sought mortgage loans by borrowers with a lower credit score. Accepts FICO scores of 580 or better with the condition of 3.5% down. Lower scores may be accepted if 10% or more is paid upfront.
While the Veterans Administration does not set a specific credit score requirement, the lenders providing the loan often require a score of 620 or better. Like FHA loans, lower scores may be accepted under certain conditions.
The U.S. Department of Agriculture also does not set a strict FICO score requirement in order for a borrower to be eligible for the loan. The primary focus of this loan is to help those with lower scores and income to afford rural housing.
Each of these conventional loan programs (backed by Fannie Mae and Freddie Mac, respectively) requires a 620 or higher as well as a low down payment (3-3.5%). The Home Possible Loan Program is also open to qualifying individuals with a credit score lower than 620, but on the condition they can submit a slightly increased down payment (5%).