Millions of consumers who want to buy homes have less than perfect credit and they often want to know if there is the way they can take advantage of today’s low interest rates and buy a home. The quick answer is it depends.
First off, anyone can buy a home with bad credit if they are paying cash. Many consumers do not have the luxury of paying cash to buy a home so I will provide information on obtaining a mortgage with bad credit.
The biggest issue is determining what is considered bad credit. Some consumers feel they have bad credit due to occasionally being late with their payment and getting charged late fees. Other consumers may feel their credit is good right after bankruptcy because they no longer owe any debts. While consumers may have a hard time grading their credit, lenders do not.
Government loans, including FHA insured, are popular mortgage loans for consumers who have credit issues. FHA does not set minimum credit scores, the lenders who grant FHA loans do. In today’s market, many lenders require a 640 FICO score to approve an FHA mortgage loan. If you do not have a 640 FICO score, you may still be in luck. I have heard of some lenders approving FHA mortgages with a 580 FICO score.
If your credit score needs some help, take action. There is a lot of resources available on steps to increase your credit score. You can get free information from the FTC or contact a professional company like CureMyScore.com for help. By taking action to improve your credit score, you can qualify for the home of your dreams and take advantage of today’s low mortgage rates.