Getting a mortgage with bad credit – that is, a credit score of about 579 or below – can be difficult, but you still have options for loans with favorable terms and APRs. Traditionally, home loans for bad credit borrowers fell to the risky subprime mortgage sector. Today, there are bad credit mortgage lenders out there ready to lend to you, including FHA home loan programs.
Here’s a look at those lenders that are most likely to present your best options for securing a home loan if your credit rating has meant you’ve been having trouble securing a mortgage.
Lenders for Bad Credit Mortgages
FHA home loans – home loans backed by the U.S. Federal Housing Administration – are a good option for those with less-than-perfect credit. The FHA sets borrower requirements. It also insures loans from lenders so that lenders can offer better deals -such as low down payments, low closing costs and easy credit qualification – to borrowers.
For someone who wants to know how to buy a house with bad credit but doesn’t want to compromise on mortgage affordability, an FHA loan is going to be one of the best options as often as not. The lenders listed here offer FHA home loans and bad-credit mortgage loans that are among the best options for consumers looking to get a mortgage despite a spotty or underdeveloped credit history.
Ditech Home Loans
Ditech could be considered one of the best mortgage lenders for poor credit, including its FHA-banked options. Ditech offers FHA home loans for customers with less-than-perfect credit scores, including options that require a down payment as low as 3.5 percent. The current rate for a 30-year fixed mortgage is 4.5 percent, and you’ll need to get mortgage insurance. Ditech also offers FHA refinance options, which also allow for credit history deficiencies.
Primary Residential Mortgage Inc.
The FHA Loan from Primary Residential Mortgage Inc. enables you to put as little as 3.5 percent down for a loan and set a term of 10, 15, 20, 25 or 30 years, making it a great option if you’re wondering how to get a home loan with bad credit. The company claims that one of the best mortgages available is an FHA-insured mortgage, which has less challenging credit requirements. This makes it a good option if you’re buying a house and have bad credit. Rates vary, though, and you’ll need to obtain mortgage insurance.
Bank of America
Bank of America‘s Affordable Loan Solution program is designed for modest-income borrowers who can’t afford a large down payment. Maximum income requirements and loan limits apply, but no mortgage insurance is required and you can put as little as 3 percent down for a 30-year, fixed-rate mortgage.
The current rates range from 4 percent to 4.5 percent and Preferred Rewards customers might qualify for a $200 to $600 reduction on their loan origination fee. What’s more, they also offer VA home loans for those who qualify.
Homebuyer education might be required for first-time homebuyers from a HUD-approved provider or through Connect to Own, Bank of America’s nationwide network of counselors.
Quicken Loans
Quicken Loans – one of the more recognizable poor credit mortgage lenders – offers 15-, 20-, 25- and 30-year, fixed-rate loans for home loan borrowers to finance their primary residences. Its FHA loan requires as little as 3.5 percent down, and rates for a non-VA fixed rate home loan runs between 3.99% and 4.56%, http://americashpaydayloan.com/payday-loans-il/ depending on its terms.
Your rate depends on your credit, type of loan, loan amount and down payment. These factors give the lender an idea of how much risk it’s taking in approving a bad credit mortgage.
Wells Fargo
Wells Fargo offers borrowers who seek a small down payment several loan options. You can get a conventional, fixed-rate mortgage with as little as 3 percent down.
With a Wells Fargo FHA loan, you are typically required to pay mortgage insurance, but you can qualify with a co-applicant. The bank also offers VA loans as well as loans through its Easy to Own Guaranteed Rural Housing Program.
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