Fulfilling your dream of homeownership is no more difficult, as various home loan programs are there to help you with this. Whether you want to buy a single family home, a duplex, a triplex, a condo or something else, you can purchase with the help of a mortgage program. Even if your credit score is not up-to-the-mark, you can buy a home with an FHA home loan program.
All that you have to do is to opt for one of the first time home buyer programs with low credit scores in Houston, TX. But before that take a look at the things that can help you to get approval for an FHA loan with bad credit.
· Come with a hefty down payment
One of the ideal things that you can do to get an FHA loan with low credit is to come with a good down payment. Based on how low your credit score, mortgage lenders will decide if you can get the loan with a particular down payment or not. If your credit score is over 580, there are various lenders who will approve you on a FHA loan for bad credit. If you have a score from 500 to 579, then you will need to come up with a 5 or 10% down payment based on what the lender wants. The higher the down payment you want to make the better the possibility that you will get the approval for an FHA loan with low credit score.
· Solid debt to income ratio
Your debt-to-income refers to all your monthly debt payments divided by your gross monthly income. This number is a way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow. Generally, the total mortgage payment you will face can’t be higher than 31% of your gross income. If it is so, there may still be some circumstances, which make FHA mortgages possible. However, this figure will have a major impact on your capability to take out an FHA mortgage with poor credit.
· Keep your property standard minimum
The property you want funding for can need some repair, however, it needs to be inhabitable and meet basic FHA standards. With an FHA loan with bad credit, you can buy a single family home, duplex, condo, or townhouse. FHA mortgages can also be obtained for purchasing a manufactured home if all guidelines and requirements are fulfilled.
· Clear CAIVRS report
A vital requirement for an FHA mortgage is to have a clean Credit Alert Verification Reporting System (CAIVRS) report. It is a federal government system, which tracks people who have late payments, have defaulted or been foreclosed for money they owe the US government. Moreover, you don’t need to owe any federal taxes to the US government. However, as long as you have an instalment plan set up for a delinquent loan or federal taxes, you should be able to get an FHA loan with poor credit.
So, without waiting any further, opt for an FHA-approved mortgage lender and apply for the loan today.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.