{"id":4007,"date":"2017-04-30T14:56:20","date_gmt":"2017-04-30T14:56:20","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/think-your-credit-score-is-too-low-to-buy-a-house-maybe-not\/"},"modified":"2017-04-30T16:26:35","modified_gmt":"2017-04-30T16:26:35","slug":"think-your-credit-score-is-too-low-to-buy-a-house-maybe-not","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/think-your-credit-score-is-too-low-to-buy-a-house-maybe-not\/","title":{"rendered":"Think Your Credit Score Is Too Low To Buy A House? Maybe Not"},"content":{"rendered":"

 <\/p>\n

\n

When it comes to your credit score, how low is too low? The number you really need to buy a house.<\/p>\n

We all know that when it comes to buying a house<\/a>, there are a few things we need, like a down payment and a good enough credit score to qualify for a loan<\/a>. But what does a “good enough credit score” really mean? Does your credit history have to be impeccable? Can you have a couple of boo-boos? And, if you do have issues on your report, how much of a hit will you take?<\/p>\n

Your credit score is “a number, roughly between 300 and 850, that summarizes a consumer’s creditworthiness,” said Bankrate. “The higher the score, the more able and willing a consumer is to repay a loan, lenders<\/a> believe. The best mortgage<\/a> rates and terms go to borrowers with credit scores of 740 and higher.”<\/p>\n

But most of us can’t measure up to that number. Thankfully, we don’t have to. There’s room for lower scores – even really low scores – depending on the type of loan you’re applying for, with a number of other factors (your income and work history, the amount of your down payment, the state of the economy) thrown in. Knowing where the bottom is will help you figure out how to proceed.<\/p>\n

FHA loans<\/a><\/b><\/p>\n

The advantage to a Federal Housing<\/a> Administration (FHA) loan for many buyers is the low down payment. You may need only 3.5% down to purchase a home with this type of loan, which is backed by the government. But, you’ll need a minimum 580 credit score if you’re only planning to put 3.5% down. Can’t meet that benchmark? You’ll need more cash up front.<\/p>\n

“If your credit score is below 580, however, you aren’t necessarily excluded from FHA loan eligibility,” said the FHA. “Applicants with lower credit scores will have to put down a 10 percent down payment if they want to qualify for a loan.”<\/p>\n

For FHA loans, your credit score can be as low as 500. But, “Those with credit scores between 500 and 579 are limited to 90 percent LTV,” which leaves a lot of people out of luck.<\/p>\n

Non-government-backed loans<\/b><\/p>\n

The issue with FHA loans for many buyers: That pesky private mortgage insurance<\/a> (PMI), which can add several hundred dollars to the monthly payment and is “required any time you put less than 20% down on a conventional loan,” said My Mortgage Insider.<\/p>\n

If you have a larger down payment, you may be able to avoid paying PMI by going with another type of loan – but only if you have the credit score. “To qualify for a conventional mortgage, a borrower generally needs a minimum credit score of 680 and at least 5 percent down,” said Bankrate. “Many lenders require at least 10 percent down.”<\/p>\n

There may be more wiggle room in that credit score if you can come up with more money for a higher down payment. But, if it’s too low, you’ll likely be pointed right back to FHA loans. On the other end, a higher score will get you the best possible interest rates.<\/p>\n

Subprime mortgages<\/b><\/p>\n

Have a credit score below 500? You’re officially in the “bad credit” zone. But, you may still be a candidate for a loan, even if you can’t qualify by FHA standards, by going with a subprime mortgage. The word “subprime” still sends shivers down the spines of many people because loans extended to what many industry professionals considered to be unqualified applicants were largely blamed for the last housing crash. Accordingly, many of these opportunities dried up in the aftermath.<\/p>\n

Today, though, subprime mortgages are available. Keep in mind that minimum credit scores will depend on the individual loan and lender, and each borrower’s unique set of financial circumstances. And, you’ll pay for the privilege of being extended a loan with higher rates and\/or fees.<\/p>\n

“Subprime mortgage lenders mostly use collateral like equity earned when considering a \u2018refinance’ or a more significant down-payment when talking about a \u2018purchase money’ transaction,” said First Time Home Financing<\/a>.<\/p>\n

Private Money Lenders<\/b><\/p>\n

If all other avenues fail, you may still be able to get a loan with your bad credit from a private money lender. These are individuals with money to spend who are looking for investments. Because your low credit score makes you risky, you’ll be charged more for your loan.<\/p>\n

“Your personal credit is usually a smaller factor in these types of loans. However, you should know that the interest rate on these loans is much higher – in the range of 10-15%,” said First Time Home Financing<\/a>. “If you really have bad credit, this could be your only option for the time being.”<\/p>\n<\/div>\n

[ad_2]<\/p>\n

Realtytimes <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

  When it comes to your credit score, how low is too low? The number you … Think Your Credit Score Is Too Low To Buy A House? Maybe Not<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":4008,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[981,4751,1403,15239,400,625,447,12908,543,617,344,698,604,408,10043,1295,312,11627,11626,11625,41,818],"class_list":["post-4007","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opportunities-in-new-markets","tag-a-house","tag-amazing","tag-buy","tag-chase","tag-credit-score","tag-down-payment","tag-financing","tag-home","tag-home-buying-guide","tag-house","tag-housing","tag-insurance","tag-loans","tag-mortgage","tag-mortgage-lenders","tag-mortgage-rate","tag-mortgages","tag-private-money","tag-private-money-lender","tag-private-money-lenders","tag-property","tag-real"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/04\/e7b440be438a181df6a6d4ae333d9965_M.jpg?fit=300%2C192&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":5352,"url":"https:\/\/amazingproperty.com.ng\/blog\/7-key-things-that-help-you-qualify-for-a-mortgage\/","url_meta":{"origin":4007,"position":0},"title":"7 Key Things That Help You Qualify For A Mortgage","author":"Amazing Property","date":"July 13, 2017","format":false,"excerpt":"In an environment where lenders are highly regulated and risk-averse, borrowers are rightfully a little nervous when they apply for a mortgage. But with the right preparation, qualifying for a home loan can be a rewarding experience in your journey toward homeownership.\r \r In a lot of ways, lenders have\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/07\/8edc3dfde045dec1197c90b56dba3342_S.jpg?fit=424%2C324&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2655,"url":"https:\/\/amazingproperty.com.ng\/blog\/freddie-to-aid-those-without-credit-scores\/","url_meta":{"origin":4007,"position":1},"title":"Freddie to Aid Those Without Credit Scores","author":"Amazing Property","date":"March 28, 2017","format":false,"excerpt":"Mortgage financing giant Freddie Mac has expanded access to credit for American families without credit scores. Beginning in June, borrowers without credit scores may be able to easily qualify for purchase mortgages or no-cash-out refinance transactions. Still, borrowers will have to show payment references, like records showing timely housing payments.\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7290,"url":"https:\/\/amazingproperty.com.ng\/blog\/slaying-that-credit-score-new-tips-for-a-new-year\/","url_meta":{"origin":4007,"position":2},"title":"Slaying That Credit Score – New Tips For A New Year","author":"Amazing Property","date":"November 29, 2017","format":false,"excerpt":"Getting ready to buy a house or just thinking about it? Where to buy, what to buy, and how you'll afford it are probably top of mind. But if you're not also concentrating on your credit score - and by concentrating on, we mean actively trying to raise your scores\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"1cae7842e0be83e82c239732111f34cd S.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/11\/1cae7842e0be83e82c239732111f34cd_S.jpg?fit=424%2C263&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2647,"url":"https:\/\/amazingproperty.com.ng\/blog\/6-tips-get-ready-buy-house-someday-infographic\/","url_meta":{"origin":4007,"position":3},"title":"6 Tips to Get Ready to Buy a House (\u2026someday) [Infographic]","author":"Amazing Property","date":"March 29, 2017","format":false,"excerpt":"Still a ways away from purchasing real estate, but want to be responsible in the mean time? No matter your timeline, these tips will help every aspiring homeowner get ready to buy a house. 1. Pay Bills on Time This is the easiest way to boost your credit score. If\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"Get-Ready-to-Buy-a-House","src":"https:\/\/i0.wp.com\/www.househunt.com\/news-realestate\/wp-content\/uploads\/2015\/06\/Get-Ready-to-Buy-a-House.jpg?resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.househunt.com\/news-realestate\/wp-content\/uploads\/2015\/06\/Get-Ready-to-Buy-a-House.jpg?resize=350%2C200 1x, https:\/\/i0.wp.com\/www.househunt.com\/news-realestate\/wp-content\/uploads\/2015\/06\/Get-Ready-to-Buy-a-House.jpg?resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.househunt.com\/news-realestate\/wp-content\/uploads\/2015\/06\/Get-Ready-to-Buy-a-House.jpg?resize=700%2C400 2x"},"classes":[]},{"id":8424,"url":"https:\/\/amazingproperty.com.ng\/blog\/much-more-to-mortgages-than-interest-rates\/","url_meta":{"origin":4007,"position":4},"title":"Much More to Mortgages Than Interest Rates","author":"Amazing Property","date":"February 26, 2018","format":false,"excerpt":"There's a significant consumer misconception that mortgages are all about interest rates. Find the lowest rate and you've got a great mortgage. Wrong. Yes, the sign-up interest rate can be important, but there is a lot more to consider. The many factors and decisions involved in mortgages determine what the\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"21a8964d6722dd60fe12f91dd284f041 S.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/02\/21a8964d6722dd60fe12f91dd284f041_S.jpg?fit=424%2C274&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1936,"url":"https:\/\/amazingproperty.com.ng\/blog\/mortgage-mistakes-that-jeopardize-closing\/","url_meta":{"origin":4007,"position":5},"title":"Mortgage Mistakes That Jeopardize Closing","author":"Amazing Property","date":"March 14, 2017","format":false,"excerpt":"After home buyers get preapproved for a loan, they aren\u2019t guaranteed a swift ride to closing. If they make a financial misstep, they could face a change to their mortgage terms and interest rate or even have their mortgage denied. Here are some tips with their finances they\u2019ll want to\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/4007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/comments?post=4007"}],"version-history":[{"count":2,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/4007\/revisions"}],"predecessor-version":[{"id":90468,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/4007\/revisions\/90468"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/media\/4008"}],"wp:attachment":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/media?parent=4007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/categories?post=4007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/tags?post=4007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}