Your credit score is one of the vital factors that lenders consider when you apply for a mortgage. Generally, the higher your score, the earlier you will get the loan approval. So, before you look for houses and apply for a loan, it is wise to check your credit report from the three major credit bureaus to know what your score is.
Are you saying it is 580? Are you saddened by thinking it is impossible to get a home loan approval? Well, it is not so. Buying a house with 580 credit score in Houston is not impossible, especially when you choose one of these home loan options –
- FHA loans
An FHA is a home loan that is insured by the Federal Housing Administration (FHA) and offered and approved by the FHA-approved lenders. Designed for low-to-moderate-income borrowers, these loans are one of the ideal choices for the homebuyers, especially for the ones who are looking for low credit home loans. As the loan is backed by the government, low risk is associated with the loan, and for this, lenders agree to approve an FHA loan despite a low credit score. You can get approval even with a 500 credit score. And if your credit score is 580, you can get the loan with as low as a 3.5% down payment. So, you can easily apply for this loan program and fulfill your dream of homeownership.
- VA loans
Are you a veteran, military officer, or a surviving spouse? If yes, then you can apply for a VA loan. Available through a program established by the United States Department of Veterans Affairs, it is a specially designed home loan program. The VA sets the qualifying standards, dictates the terms of the mortgage offered, and guarantees a portion of the loan, but does not offer the loan. It is offered by private lenders. However, as like FHA loans, it is also a government-backed home loan, lenders will approve the loan even with a low credit score. So, if you want to get approval for a home loan with a 580 credit score and you are a military officer or veteran or a surviving spouse, you can choose this loan and apply for it.
- USDA loans
If you are a citizen of the U.S. and want to apply for a low credit home loan to buy a home in a rural area, then you can choose this home loan option. These loans are guaranteed by the United States Department of Agriculture (USDA) and offered by private lenders. The purpose of the loan is to provide affordable homeownership opportunities to low-to-moderate income group people. Check the requirements of this loan and if you can fulfill it, then go for this loan.
So, with a 580 credit score, you can apply for FHA, VA, and USDA home loan programs and buy a home of your dream. And if you can take steps to improve your credit score, you could have other options too. Now, decide what you want and move accordingly.