A bad or low credit rating makes applying for and qualifying for a home mortgage loan hard. Not only do you have to go through all the financial background checks to prove your capability of paying back the loan, but you also need to submit many documents and even present assets to serve as collateral.

That’s where home mortgage loans for bad credit and low credit come in.

Mortgage Capital offers you one of the best mortgage loan options ideal for your financial status, needs, and wants. We’re all about providing you the opportunity to get your dream home with the help of our financial assistance.

Continue reading to know more about how to successfully apply for home mortgage loans even if you have less-than-ideal credit ratings.

Bad Credit & Low Credit Mortgage Loan Requirements

Usually having a bad or low credit score can hinder your application for any mortgage loans. But for some lenders, it is still possible for a loan to be approved even if your credit score is low. 

First, to be consideredas having a bad or low credit score, lenders consider several factors such as:

• 300 – 579 credit score
• Multiple late payments
• High balances on credit cards and loans
• Multiple new accounts
• Debts sent to collections
• Loan default
• Bankruptcy
• Foreclosure
• Short sale

How to Buy a House with Bad Credit

Credit rating

Know your actual and current credit score so you can get an insight into the kind of loan you are applying for. Review your credit report so you can see errors before you submit it to the mortgage lender. You can even dispute certain credit rating errors to further improve your credit rating before loan submission.

Improve your Credit Score

Having a low or bad credit score is not the end of the world. After all, it is still possible for you to still have a mortgage and even take steps to improve your credit score. To do this, all your bills must be paid on time, try to make lesser charges on your credit cards, you can also pay any existing debts using cash, and lastly, your old credit lines must remain open.

Look for Mortgage Loans for Low Credit

Improving your credit score will take time, so try to look for other types of loans suited to your needs and situation.

Home Loans for Bad Credit

There are a variety of loans made available for individuals with low credit scores.

You can also reach out to us in Mortgage Capital. Here we can help you with a variety of loans that are made to help you especially if you have a bad or low credit score. After all, our local mortgage loan specialists can help you despite your bad or low credit score.

FHA Loans

Easy to Qualify for those with low credit scores, FHA loans are government-backed and insured loan designs for individuals with bad and low credit scores. 

At the same time, FHA loans have a 3.5% down payment and better interest rates which makes it easier for people to own homes.

VA Loans

VA loans are available for those on active duty or honourably discharged survival members. It is also available for individuals with bad or low credit scores.

However, to qualify for this loan you must be either of the following:

• 181 days of active peacetime duty
• 90 days of active wartime duty
• A member of the Reserves or National Guard for 6 Years
• A spouse to a service member Killed in Duty
• Receive disability payments from the VA

USDA Loans

Insured by the US Department of Agriculture, the USDA Loan is available to individuals who are looking to buy or refinance their home loan in an area that is considered beyond any major metropolitan area.

Most of the time, anyone who meets the requirements for minimum credit and local area income is eligible for this loan. This loan is only available if they are looking to buy or refinance their property loan that is outside of any major metropolitan area.

The Lowest Credit Score To Get A Home Mortgage

When looking for the lowest credit score to get a home mortgage, it will depend on where you are. For many lenders, the lowest qualified score is 300 to 580 credit score.

For FHA loans, applicants must have a minimum of a 590 credit score.

For VA Loans, there is no set minimum credit score but lenders look at the applicant’s satisfactory credit risk.

For USDA Loans, as long as you meet the set minimum credit score and are buying a home outside of any major metropolitan area.

How to Find Direct Lenders for Mortgage Loans with Bad Credit

When it comes to looking for direct lenders there are several ways you can try.

First, Research online about direct lenders that offer these types of loans. Check if they are reliable and trusted lenders by checking reviews and their loans.

Second, you can also contact your local banks or friends if they have any lenders that can refer you.

Also, go to your local government and explore loans that fit your needs. They could also refer you to other lenders that can help you.

Mortgage Lenders Who Work with Bad Credit

If you are looking to apply for a mortgage loan despite your bad or low credit score, You can reach out to us in Mortgage Capital. 

Even if you are a first-time buyer or looking to downsize, mortgage Capital can help you with a variety of loans for people with a bad or low credit score. After all, our local mortgage loan specialists can help you despite your bad or low credit score.

So reach out to us now or visit our website and explore the types of loans we have.