Poor credit? A few options

Green Escrow | Credit Score

Last week we looked at other factors that may come into play when your credit, as a first-time buyer, is poor. What are some options to finding a lender?

  • FHA Loans: The federal Housing Administration on requires a credit score of 580 and a down payment of 3.5 percent. Many lenders won’t go below a credit score of 620, so you may have to look around.
  • VA Loans: Military personnel (current or former) can benefit from very low – or no – down payment or mortgage insurance.
  • Credit Karma: Credit Karma can help with crucial credit decisions so that you can improve your credit score before you apply for a mortgage.

Poor credit? Other factors to consider

If you are a first-time homebuyer with less than stellar credit – relax (at least a little bit). Fortunately for you, it is common for first-time buyers to have credit issues so there are some options available.

  • Down payment: Paying a high down payment certainly increases your chances at getting a good mortage.
  • Employment history: A strong and long history of employment and a high income to loan value ration will work in your favor.
  • Monthly rent: If your mortgage payments will be similar to what you are currently paying in rent, this shows you can meet the monthly payments.
  • Savings account: A good savings account is always a plus.

Next time we’ll look at specific options at finding a lender when your credit is poor.