Low credit score – these three words are enough to sadden you, especially when you are about to apply for a home loan program. Your credit score showcases your creditworthiness. So, the higher the score, the better the creditworthy you will be to a lender. And with a low score, it might be difficult for you to ensure loan approval.
But you don’t need to worry. There is always a chance to improve your credit score. Besides, you can opt for the lenders who offer home loans for low credit scores in Houston TX. Want to know about the loan options? Here, we have listed down a few for you –
1. FHA loans
It is one of the first home loans that you can choose. An FHA loan is insured by the Federal Housing Administration and offered by the FHA-approved lenders. As these are government-backed loans, the loan requirement is much lower than traditional loans. You can get approval for this loan with as low as a 500 credit score and a 3.5% down payment. But not everyone can qualify for this loan. If you have a history of repeated late payments or several loan delinquencies, then it can be difficult for you to qualify for an FHA loan. But the requirements for an FHA loan are friendly and forgiving of financial issues in the past.
2. VA loans
In case you are a former member of the military, an active member of the military, or the spouse of a deceased military member, you can qualify for a VA loan. Insured by the United States Department of Veterans Affairs and offered by the VA lenders, it is a great home loan option. For starters, there is no requirement for a down payment. This loan can also come with a decent interest rate, especially for a buyer with a low credit score. You should know that there are fees associated with a VA loan, which you will not find with other home loan programs. But when it comes to low credit score home loans, VA loans are a great option for you.
3. USDA loans
Another great option for you when you want to buy a home in a designated rural area. The property does not need to be a farm, and you don’t need to be a farmer or be a part of the agriculture industry. But the requirements tend to involve your credit score, your income, being a citizen of the U.S., the condition of the home, and where the property is located. When you use a USDA loan, you do not need to make any down payment and the credit score requirement is lenient. So, you can easily apply to get approval for this loan.
So, check these home loan options carefully and then apply for the one that will be the right choice for you.