Your credit score is not only a three digital numerical number that reflects your creditworthiness but also a fundamental factor that can determine your eligibility for home loan programs. When approving a home loan program, mortgage lenders check the creditworthiness of a buyer. And needless to say, the higher score always work at your advantage.
However, that does not mean you can’t get approval for 500 credit score home loans in Houston or it is completely impossible for you to ensure your dream of homeownership. It can be difficult but not impossible as when there is a will there is a way. Here are a few tricks that can help you to ensure a home loan approval with a 500 credit score.
Come with a decent down payment
The down payment is the amount that you need to provide when you buy something on credit. And it is applicable for a home loan program too. When you come with a hefty down payment, it will work as your support system and you need to borrow less. So, it will be easier for you to get approval. Start saving for the down payment to ensure loan approval with bad credit.
Look for FHA and VA loans
Unlike conventional home loan programs, FHA, backed by the Federal Housing Administration, and VA, insured by the United States Department of Veterans Affairs, have lenient credit requirements. You can get these loan approvals with as low as a 500 credit score. But you should keep these in mind that the FHA is specially designed for first-time homebuyers while the VA is for veterans and military officers. If you can fulfill the eligibility criteria, you can opt for any of these loan programs.
Shop for lenders
Although there are some guidelines, mortgage lenders set their own rules for credit requirements. So, the credit requirement varies from a lender to another one. While a lender asks for a high credit score for approving a home loan, another one might be ready to approve it with a 500 credit score. So, it would better for you to ask for quotes from different lenders, compare them, and then opt for the one that will be suitable for you.
Come with a co-signer
Coming with a co-signer with a good credit score is another way to ensure a home loan with low credit. Look among your relatives and family members, who have a good credit score. Ask any of them whether he or she is ready to work as your co-signer in your home mortgage process. If they nodded positively, go for it. It will help you a lot.
These are some of the common tricks that can help you to get a home loan approval with a low credit score. You can use one or a couple of them to ensure loan approval and realize your dream. So, what to wait for? Start working on the tricks from today.
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.