The thought of buying a house can be overwhelming. Starting the home buying process by buying a home with bad credit can make it seem nearly impossible to get a loan, but did you know there's such a thing as a bad credit home loan? Your credit might not be as much of a roadblock as you think.
In this post, we'll talk about buying a house with bad credit in Arizona, understanding your credit score, how to qualify for a mortgage, and increasing your score quickly.
What Do Mortgage Lenders Consider A Bad Credit Score?
Most borrowers don't know this, but many lenders don't require a specific minimum credit score to buy a house. The catch-22 is that a conventional mortgage lender is free to set their requirements regarding your credit score. Although government-backed loans give mortgage lenders some peace of mind, they still have credit score requirements, even if they are usually much lower.
If you have a credit score lower than 500, you might find getting a mortgage a bit hard and will probably need to focus on increasing your score first.
When it comes to the actual number, anything less than a 670 FICO® Score is considered "bad" or "subprime," according to Experian™, one of the three main credit bureaus. More specifically, a fair score is 580 to 669, while a poor score is 300 to 579. The thing about having poor credit is that it's not the same as someone else's bad credit.
No two situations are the same, and outside of your actual score, lenders will also be looking at things like:
How much the borrower has available for a down payment
The borrower's overall amount of debt
How much income does the borrower earn
If the borrower has any debts in collections
Cash is your best friend when you have bad credit, and the more of it you have to use toward a down payment, the better. Your credit score might only qualify you for a specific mortgage loan amount. If you can cover the difference with cash, you can still afford the home you want.
The lender you end up with will also play a factor because all lenders will have different requirements. While you can get a bad credit loan, you must be prepared to pay a higher monthly mortgage due to higher interest rates.
Don't forget, if you purchase a home with bad credit, you can permanently repair your credit and refinance your mortgage for much better loan terms later on.
NCO Enterprises LLC Dba Setabay Private Hard Money 26731 N 90th Drive Peoria AZ 85383 Telephone: 623-582-4444 NMLS 2062278 NMLS 1118493
Equal Housing Opportunity. This is not a Good Faith Estimate nor a Guarantee to lend and should not be considered as such. Costs, rates, estimates, and terms can only be determined after completing an application. Actual payments will vary based on your situation and current rates. APR for loans ranges from 7.99 - 29.5% and is based on Credit Score, Down Payment, LTV, and Income. Mortgage rates could change daily. For more accurate and personalized results, please call 623 582 4444 to talk to a licensed mortgage expert. Terms and conditions of all loan programs are subject to change without notice. NCO Enterprises LLC Dba Setabay Private Hard Money 26731 N 90th Drive Peoria AZ 85383 Telephone: 623-582-4444 NMLS 2062278 NMLS 1118493 This email is for the exclusive use of the intended recipients and may contain privileged and confidential information. If you are not an intended recipient, please notify the sender, delete the email from your computer, and do not copy or disclose it to anyone else. Your receipt of this message is not intended to waive any applicable privilege. Neither this email nor any attachments establish a client relationship, constitute an electronic signature, or provide consent to contract electronically unless expressed by Matt Prosory RI/CEO, in this email or an attachment. To the extent this message includes any tax or legal advice. This message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This email is an advertisement.
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