Challenged Credit Loan Programs

Challenged Credit Loan Programs2020-05-07T09:45:08+00:00

One of the top reasons that stop people from attempting to purchase a home is the fear that their credit history or credit score won’t be good enough to get them qualified for a home mortgage loan. While with some loan programs this may be true, there are several more other mortgage loan options that are available that accept less than favorable credit scores or marks on your credit history.

Understanding Credit Scores

Credit scores are essentially a grade given to an individual that estimates the likelihood that 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 and positively and a score that is below “Good” may require mortgage loan applicants to put more money down or have a higher interest rate.

Overall, the rankings for scores is as follows:

  • 800 – 850 = Excellent
  • 740 – 799 = Very Good
  • 670 – 739 = Good
  • 580 – 669 = Bad
  • 300 – 579 = Poor

Improving Your Credit

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 damage credit, including helping them improve their score prior to applying for a loan.

Loans For Poor or Limited Credit History

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:

FHA Loans: One of the most commonly sought 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.

VA Loans: 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.

USDA Loan: 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.

HomeReady/ Home Possible: Both of the conventional loan programs backed by Fannie Mae and Freddie Mac, respectively, only require a 620 or higher. Higher rates often translate into better rates and the Home Possible Loan Program is also open to qualifying individuals with lesser credit with a slightly increased down payment.

KNOWLEDGE CENTER

Have a question?

Speak with a loan specialist at (813)-767-5020 or fill out the form.