Can I Get a Home Mortgage with a Low Credit Score?

Can I Get a Home Mortgage with a Low Credit Score?

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Dealing with home mortgage rejection

If you think it is time to get your own Charlotte NC home but are afraid you’ll be denied because your credit score is less than ideal, you’re not alone. Many people would like to acquire a mortgage, but their fear of denial keeps from applying for one.

Your credit score has a significant impact on your home purchasing power.  But do you know you can still acquire a home mortgage even with your not-so-pleasing credit score? If you are set on getting a home in Charlotte,  there are other ways you can obtain one.

Before you explore your other options, you first need to know what exactly is the credit score the lender requires. Credit score runs from 350 to 850,  with 700-740 as the base for good borrowers, but lenders differ in the credit score requirement. While your bank may ask for a credit score in the range of 700, others may be okay with a score of 650 and above to qualify you for a conventional home mortgage.

Check the credit score requirement of the banks and lenders in your area to see which ones will accept your credit score.

Alternative options to finance a home in Charlotte


Once you have your score evaluated and realized it’s still lower than what many lenders require, it is time to seek for alternative ways of getting a home loan.

Charlotte NC Home for Sale -  Discover alternative ways of funding the Charlotte NC home you've been dreaming of.

 

  1. Opt for smaller banks or credit unions.

If your FICO score happens to be sitting in the low end of the credit spectrum, but you have a sizable amount of savings in the bank, try asking for a mortgage from smaller banks or credit unions. These lenders have more flexible lending guidelines, so you can approach them and explain your situation. A substantial down payment will also help because it lessens your premium, so it’s less risky lending to you.

  1. Look at non conventional lending programs like Federal Housing Administration loan.

For many years, FHA has been supporting people on the mid-range FICO score range to avail of mortgage loans. This year, FHA released a new policy which allows more mid-range FICO scores to get a housing loan.

If your credit score is above 580, you are eligible for a 3.5% down payment. If you belong to the range of 500 - 579, you are still qualified for a loan but must provide a 10% down payment on the home.

  1. Ask help from a family member with excellent credit to take the loan, or co-sign.

This option will work if you know a family member (parents, sibling) or a friend who has an excellent credit score and a reliable income to help you out and co-sign your loan. It is common among students paying off their student loans, or young couples who would like to get a home of their own.

When you need to refinance or get a home for sale in Charlotte, the suggestions presented above are good choices. However, it’s better to wait for your credit score to improve before you apply for a mortgage. This way, you don’t have to put out a lot of money, and your mortgage rate will not be so high.

Don’t let your not-so-sterling credit score hamper your dream of buying your own Charlotte NC home.

Call me, Nancy Braun, at (704) 997-3794. I can help you find the home that fits your budget and lifestyle.

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