Many people worry about their credit scores while planning to buy a house. But mortgage lenders care less about low credit scores than people think. Lenders are more likely to care about whether you are capable of paying them back each month. For this reason, they are more interested in your employment stability as well as your annual income. A significant number of loan applications are getting approved with bad credit scores. So, people can buy a home even with bad credit.
When the credit score falls below the lender’s minimum standards, it is considered bad credit. However, the minimum standard can vary among lenders. For instance, the minimum credit score for conventional loans is 620. You also have to make a minimum down payment of three percent for this loan which is a great choice for those who have a low credit score.
FHA loans are also another great option for a home buyer with a bad credit score. Even this loan also has provisions for buyers with no credit. That’s why it is considered the original “bad credit” mortgage loan. VA loans and the Homebuyer Assistance Program are some other options that can help you to buy a house with bad credit.
However, remember that credit scores are not permanent. There are always some opportunities to enhance your credit score. You just need to practice some good financial behavior that can help you to bring a significant difference in your credit score. So, it is wise to make some organized moves to build a handsome financial profile with a good credit score.