How to apply for a mortgage if you have a bad credit history - ForumDaily
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How to apply for a mortgage if you have a bad credit history

If you want to know how to apply for a mortgage with a bad credit history, you should first find out what credit rating is considered bad. It begins with the figure for the FICO system from 579 and below.

Фото: Depositphotos

Loans for people with bad credit history in the US are available, albeit at higher interest rates, the newspaper writes GO Banking Rates.

FHA loans

There are many banks that offer so-called FHA home purchase loans. These loans are insured by the Federal Housing Administration, their goal is to increase the number of homeowners among Americans.

Just search in Google will give many options for banks providing such loans.

FHA loans are available to people with a credit rating of 500 points. If your credit rating is from 500 to 580, you will need to pay at least 10% of the value of the house as a down payment.

Adjustment

If your credit rating is bad because your credit history is too short, or you have never used loans in your life, you can resort to an adjustment. This means that the loan officer, when deciding on your application, will consider other factors that determine the issuance of a mortgage, in addition to your low credit score.

Banks offering such loans will need to provide documentation about your work and income, as well as information about how timely you pay utility bills or rental payments.

Portfolio loans

Portfolio loans are available in small local banks and credit unions. In the application for such a loan, you must provide more data, which gives you the opportunity to explain why your credit rating is low or to name circumstances related to what has affected your credit rating.

Bank specialists will review this additional information and make a decision depending on the circumstances, paying much less attention to your FICO score.

Mortgage from the Administration of veterans

Loans from the Veterans Administration (VA) are designed to help the military and veterans become homeowners.

Although lenders working with VA usually want to see a credit rating of 620 points or more, some of them still give loans to applicants who have 580 points of credit rating.

Interest rates based on credit rating

The table below shows the interest rates and the monthly payment on an 30-year fixed mortgage to buy a house worth 200 000 dollars for borrowers with different credit points.

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