If you are a first time home buyer and looking to get a mortgage with bad credit, you are in the right place. Here we will break down a few simple points to get you on your way to buying your first home – with less than desirable credit.
Where Do I Start?
If you have an idea that your credit is less than appealing, find out for yourself. It doesn’t cost a dime for you to check your own credit score. This is an important step not only because you will find out what your standing credit score is, but it will also give you the opportunity to look through your records and see what is causing your low credit score. Sometimes, there may be an error made, which can be quickly fixed to allow your credit score to climb back up over a period of time.
How Do I Know How Much I Can Borrow?
When looking for a mortgage loan you will need to meet with a lender. They will determine if you are eligible to receive a loan from them and either approve or deny your application. Generally, this decision is based on a few factors, one being your credit score. The higher your score, the better interest rates you are eligible for and the better your offer will be. A good credit score sits at around 700 and above. For credit scores ranging from 600’s and below, you might have a more difficult time being approved for a loan. If you do find yourself in this category, don’t fear. There are some other options worth looking into.
What Loan Options Are Available to Me?
If you find yourself with a low credit score, and on the hunt for a mortgage loan with bad credit- there may be a few different loan options out there available to you. One of those options would be an FHA or Federal Housing Administration Mortgage. These are usually offered by private lenders and have more flexible rules and regulations than your standard mortgage loan. Another option you might be offered is a “subprime mortgage.”
Usually, the “prime” mortgages are offered to individuals with higher credit scores. With these loans, the interest rate is considerably higher and can increase, and the payments are high as well. This is not all, take your time and search around. Some lenders are more willing to work with your low credit score than others are. Don’t write off your chances at a “prime” loan without exhausting all of your resources.
Contact Bob Buys Houses
We hope you enjoyed our tips for you, on your way to getting a mortgage with bad credit. No matter where you are on the scale, search your options and find the one that’s the best fit for you. When you are ready to sell in Salt Lake City, Utah, keep Bob Buys Houses in mind. We buy houses in the Salt Lake County area and would be happy to talk with you about how we can help. Contact us today!