Published on December 4, 2018
Is It Possible to Get a Home Loan if You Have Bad Credit?
Don’t let bad credit ruin your chances of owning your own home. Whether you’ve fallen on hard financial times, or simply haven’t built up a strong credit score, it can seem impossible to become approved for a home loan without stellar credit. If you’re still searching for a loan that works for you, take a look at these competitive options.
Flexible and Generous FHA Loans
An FHA mortgage is an excellent way to receive financing without worrying about your credit score. These mortgages are typically willing to work with potential buyers who are struggling with their credit score. Because it’s government insured, you’ll be confident in the security of your mortgage. You can also look forward to the following benefits:
- Easy refinancing
- Interest rates as low as 3.5 percent
- Adjustable rate mortgages for 3 or 5 years available
- No prepayment penalty
- Lower credit requirements
There’s a lot to love about these excellent loans, particularly if you’re a first-time buyer. Many other mortgages can’t compete with these interest rates for individuals who have lower credit scores.
Comparing Conventional Loans
While you be discouraged from seeking a traditional mortgage due to your credit score, it’s worth shopping around to see what’s available. Banks and lending institutions vary in regards to the requirements of their mortgages. Some lenders will provide mortgages to potential buyers with low credit, but charge premiums or higher interest rates.
If you’re able to secure a conventional loan, you’ll save on mortgage premiums and enjoy a range of terms. Depending on the amount you have available for a downpayment, some lenders may consider working with you even with a lower credit score.
Start the Journey to Homeownership Today
Whether you choose an FHA or a conventional loan, there’s still hope for you despite your credit score. Homeownership is an exciting adventure and a great way to build your credit score, invest wisely and secure a comfortable, memorable home.