Your credit score is one of the fundamental things that your lender will check when you apply for a home loan program. While the higher credit score will always at your advantage, low credit can be the reason for your headache. But that does not mean there is no possibility for yourself to get a home loan approval and fulfilling your dream of homeownership.
There are lenders who can approve your loan even when the credit score is low. So, buying a house with 580 credit score in Houston is not completely impossible for you. Besides, you can choose a lender based on some tips. Here are the tips –
Get your credit score in shape
Not everyone can qualify for a home loan program. You need to meet certain criteria to assure mortgage lenders you can repay the home loan. A low credit score signs that your lending can be risky and it also means that you have to pay a higher interest rate for your home loan. The higher your credit score and the more on-time payments you will make, the more opportunity you have to negotiate for better rates with potential lenders. Generally, the 580 credit score is neither too good not too bad. But you can take steps to improve your credit score to lower interest rates and ensure approval from several mortgage lenders.
Receiving a mortgage preapproval letter before you start looking at houses will give you an edge when bidding against other buyers. The letter will show the seller that you are a serious buyer whose loan is likely to close. It works as proof that a lender has evaluated your finances and figured out how much you can afford to borrow, and so, how much you can afford. Getting preapproved will save your time later. When you are ready to make an offer on a house, lenders will already have the information they need to process your home loan. You try to get preapproved by more than one lender. Then you can compare loan estimate forms from each one to decide who offers you the best rate and terms.
Compare rates from several lenders
Start your search for the best mortgage lender with a 580 credit score online. You should keep this in mind that the rate quote you see online is just an estimate. A lender will check your credit information and then process a loan application to offer you an accurate rate that you can later if you are satisfied with the quote. Once you have several quotes in hand, you can compare costs and then decide which one makes the most financial sense for you. When there is more to find than picking the lowest rate, that does not mean the rate is not important. The total interest that you pay over the life of the loan is a big figure, and a low rate can save you thousands of dollars.
These are some of the tips that can help you to find the best mortgage lender for a home loan with a 580 credit score. So, keep these in mind and apply these when needed.
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.