4 Tips to Follow to Get 500 Credit Score Home Loans in Houston
Have things like not paying debt on time and credit card mistakes drastically affected your credit score? Are you worried about how to buy a home as it is difficult to get approval for a home loan with low credit? Well, it is difficult, but not impossible. You can get a home loan with as low as a 500 credit score.
There are lenders who offer 500 credit score home loans in Houston. You can opt for any of the lenders. Besides, you can follow these tips to get approval for a home loan with a 500 credit score.
Come with a decent down payment
A down payment is an amount that you have to pay when you buy something on credit. Generally, a borrower has to come with a 20% down payment to get approval for a conventional home loan program. The higher the down payment amount the more trustworthy you will be as a lender because you have to lend less. So, when your credit score is low, try to save as much as possible for your down payment. With a higher down payment, you have to borrow less. So, you will easily get approval from a lender in spite of having a low credit score.
Apply for government-backed home loan programs
The eligibility requirement for a government-backed home loan program is lenient than conventional home loans. This is why; you can get approval for a government-backed home loan even with a low credit score while for conventional loans, you need to have good credit. FHA loans that are backed by the Federal Housing Administration need only a 500 credit score. Besides, you can get a VA loan with low credit. But these loans have other requirements that you have to fulfil for getting approval.
Look for co-signer
If you have bad credit, you can consider seeking help from a friend or family member to work as a co-signer. This is not a small favor. This is because the co-signer is responsible for the repayment of the entire debt, not just a part, in case you default. Besides, if payments are late or not made, the credit of the co-signer will be damaged. So, be careful and never force anyone to work as your co-signer.
The requirements for getting approval for a home loan program differ from a lender to another one. While one lender asks for a high credit score to approve a home loan, another one may be ready to approve your loan even with low credit. So, don’t choose the very first lender you come in contact with. Rather, ask for quotes from different lenders, compare them properly and then opt for the one who is ready to approve your loan with low credit.
So, when you want to apply for a home loan, follow these tips properly. You are sure to get an approval for the loan and fulfill your dream of homeownership.
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.