How Borrowers with Bad Credit Find Mortgage Lenders
Do you want to buy a home but you think your bad credit is holding you back? Think again!
If your credit is poor but you maintain a steady income and employment you can qualify for a mortgage. Although individuals with higher credit scores receive terms and rates that someone with a lower score would not, the ability to obtain financing is there. Here are a few options to explore when you are ready to pre-qualify.
The Federal Housing Administration has loosened their requirements making it easier to qualify for a 30 year fixed rate mortgage. They offer funding to individuals with a score of 580 or above with additional down payment. With 6% seller concessions you don't need a lot of cash down.
Hard Money Lender
This option is great for extremely poor credit borrowers because hard money lenders will fund all credit scores. The downside is the amount of the down payment can be considerably large. If you have bad credit but have a lot of cash on hand, this could be a good option for you. Keep in mind these loans often carry high interest rates.
Adjustable Rate Mortgages are still available to people with bad credit. The interest rate tends to be higher and you may need to put more money down to qualify, but it could be a good short term fit if you have options in the future that enable you to refinance.
Meet with a Broker
Brokers have options for every type of borrower. They have access to county and bank programs that local lenders may not. If there is a program for you, a broker would know of it.
I have included the following resources to help buyers find funding:
GOVERNMENT GRANTS FOR BUYING A HOME- Resources for First-time Homebuyers, Foreclosure Assistance, Home Improvement Loans, Special Funding Programs, Applications and Contact Info.
DOWN PAYMENT ASSISTANCE- Nehemiah Down Payment Assistance Program- Offers 3% of the final sales price to qualified buyer for the down payment allowing buyers to purchase with no down payment when combined with FHA loan.
Anoka County First Time Buyer and Payment Assistance Programs- Many programs offered, visit the site for detailed information.
Plymouth Buyer Grants & Assistance Programs- Zero interest deferred loan up to $25,000, repair grants, rehabilitation loans, other programs are available.
Dakota County Community Development Agency- Family Self Sufficiency Program, Downpayment assistance, home improvement loan, buyer education....
HOME Help- interest free, deferred loan with potential forgiveness to help with downpayment and closing costs.
City Living Home Program- Sponsored by the Cities of Minneapolis and St Paul to provide mortgage financing and special assistance for down payment and closing costs.
HAF Program- provides up to $3,000 to help with down payment or closing costs, also provides up to $75 per month to help pay a portion of the mortgage during the early years.
St Paul Home Owner Incentive Programs- emergency loan deferred payment, rehab program, CASA program, CD program, Habitat for Humanity, multiple down payment, emergency, closing cost, renovation, and neighborhood specific programs offered through this site.
There are many programs available through local community action partnerships and housing agencies. To find out if you qualify or what programs are available to you, contact your local Community Action Partnership Agency. Additionally, churches have funds available to assist with home purchases or repairs, if you are a member of a church- inquire as to what programs may be available to you. You can also contact your local county office to find out what programs they offer.
If you are interested in receiving more information or need additional resources, please contact our team, we are happy to help in any way we can.