3 Loan Programs That Can Help You Get House loans for bad credit in Houston
Author : Joan Gallardo | Published On : 11 May 2021
Your credit score is one of the most significant factors that can either increase or decrease the chances of having a home loan approved. While having good credit helps you qualify for a lower mortgage rate, having bad credit reduces your creditworthiness and creates roadblocks in your path of loan approval.
It doesn't mean that you stop fantasizing about owning a house. It's because there are House loans for bad credit in Houston available. Are you curious as to what these are? Here are a few loan schemes that you can apply for even though you have a bad credit score.
It was created by the United States Department of Veterans Affairs to assist veterans, former service members, and their surviving spouses in realizing their goal of owning a home. About the fact that it is a government-backed home loan, the VA does not provide it. Mortgage lenders offer this loan.
However, unlike FHA loans, VA loans do not have a minimum credit score requirement. Lenders, on the other hand, will request a credit score. However, since the VA supports it, it is more stable and can be obtained even with a poor credit score. As a result, whether you are a soldier, former service member, or surviving partner, you can conveniently apply for this loan and purchase the home of your dreams.
Are you looking to buy your first home? You don't have a decent credit score? Are you unable to make a fair down payment? If you answered yes to all of these questions, an FHA loan could help you out financially.
It is a specially structured home loan program, guaranteed by the Federal Housing Administration, that allows homebuyers to qualify for a loan with as little as a 500 credit score and a 3.5 percent down payment. However, since mortgage lenders rather than the FHA provide the loan, the collateral requirements can differ significantly. The criterion would, however, be less stringent than for standard loan schemes. Therefore, this loan is a good option.
USDA home loans are another choice for a borrower with a bad credit score. The US Department of Agriculture guarantees this loan, which is tailored specifically for low-to-moderate-income home buyers. This pledge acts as a cover for USDA mortgage lenders, allowing them to deliver low credit scores, low interest rates, and no down payment.
However, you can only buy a house in a remote area with this loan. So, if you're looking to buy a home in a rural area and have a low-to-moderate wage, you should be able to get this loan.
As a result, the top three home loan choices for a low-credit borrower are FHA, VA, and USDA. You will have a lot of opportunities if you work to boost your credit score. Hence, do whatever you can before applying for a home loan scheme.