3 Home Loans for Low Credit based on Different Situations in Houston, TX

3 Home Loans for Low Credit based on Different Situations in Houston, TX

Let’s face the bitter truth – getting approved for a conventional mortgage with poor credit score is simply a nightmare. However, there is a spark of hope only if you move attention to FHA, VA, and other nontraditional mortgages.

Yes, there are home loans for low credit scores in Houston, TX for people with different scenarios. For example, if you are a war veteran, you can unlock the benefits of a particular loan. Let’s find out those mortgages that can shape your dream into reality even when you are swamped with poor credit scores.

If You are Looking for Low Down Payment

When you are struggling with a low credit score and facing rejections for conventional loans, an FHA loan comes to the rescue. Familiar with loan-level pricing adjustments, the FHA loans do not have risk-based pricing. If your credit score is 580 or higher, you can choose a 3.5% down payment. In case, you do not have 580 credit scores and the mark is between 500 and 580, you can apply for a 10% down payment. FHA permits the lenders to pay off the homebuyer’s closing costs and makes particular allowances for the borrowers who can submit 12-month of nontraditional credit history.

If You Live in the Rural Areas

Did you know more than 90% of the country is listed for USDA loans? So, when you are thinking of farms and the open road, you might be making a huge mistake. The U.S. Department of Agriculture initiated the USDA mortgage program for opening chances to achieve homeownership in the rural parts of the United States. Drawing similarity to the VA loans, the borrowers can get full financing because there is no down payment required, either. If you meet the eligibility criteria and other vital requirements, you can buy an existing or new residential property as long as it is your chief residence. You can further refinance the qualified loans and get site preparation expenses (including foundation plantings, sod installations, or gardening) covered. Additionally, essential home appliances such as refrigerators, heating and cooling equipment, ovens, and dryers are covered under the mortgage.

If You are a Veteran

Designed for the military service members who have sacrificed their lives and a lot more, VA loan comes with a range of benefits. If you are a qualifying veteran or his/her surviving spouse, you can avail zero down payment loans. Along with the lenient credit scores ranging between 500 and 550, VA loan does not ask for mortgage insurance. The mortgages do not have risk-based pricing adjustments and the rates are similar to the high-credit loans. Therefore, the credit score is not a concerning matter as you would assume beforehand. If you are looking for a way to purchase a single-unit or multi-unit property, the VA loan features are a great fit. The borrowers can also choose between 10-year, 30-year, 15-year, and 25-year fixed-rate mortgages.

Besides these options, you can have a look at FHA 203(K) loan, FHA streamline refinance, and Fannie Mae HomeReady. You can ask your lender for help and figure out which mortgage will be suitable for your situation.

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.

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