The First Time Home Buyer program is a ray of hope for homebuyers who want to get a home loan approval with a low credit score and down payment. As it is a government-backed home loan program, FHA-approved lenders have lenient requirements.
Look for the lenders who offer first time home buyer programs with low credit scores in Houston, TX and apply for the loan. Do you have questions about these loans? Let’s find the answers –
- What is the required credit score to buy a property?
As the FHA does not approve this loan, it does not mention any credit score for the loan approval. The credit requirements vary from a lender t another one. But most FHA loans generally require your FICO score to be at least 500 to 580. The actual numbers required are often considered jointly with what percentage of home’s value is included in the down payment. However, you should keep this in mind that the minimum requirement is around 500, and the higher the score the better creditworthy you will be.
- Is it possible to get a home loan with a 500 credit score?
Technically, it is possible, as there is no low instructing a minimum credit score required to opt for a home loan program. Generally, a lender can offer loans at their discretion, no matter the credit history of the borrower. Unlike other conventional home loan programs, FHA loans can be approved only with 500 credit scores, but it depends on the lenders – whether they are ready to approve it or not. But most FHA loans given to borrowers with a credit score of 500 require a 10% down payment. So, when you want to get approval for an FHA loan with a 500 credit score, you should try to come with a decent down payment.
- Which FICO score do mortgage lenders use?
Most lenders check the creditworthiness of a borrower based on his or her FICO credit score. Developed by Fair, Isaac, and Company, a FICO score is a credit scoring and risk analysis system that quickly became a fixture of consumer lending upon its formation in 1956. FICO scores have diverse names at each of the three major United States credit reporting companies including Equifax, Experian, and TransUnion. These three are most commonly referred to when a mortgage lender is determining whether to provide you with an FHA loan or not.
- How easily can I boost my credit score?
Credit scores are the results of many variables, such as payment history, credit utilization, credit mixture and length of credit history. Some of these are calculated quickly while others can require weeks or months to accurately compute. So, there is no accurate way to calculate how long or short it will take to earn a better credit score. But you can begin by focusing on accruing a history of consistent payments that is the most influential factor in a credit score.
If you have any more questions, then ask an FHA-approved lender. And once you are satisfied with the answers, apply for the loan to that lender and go a step closer to your dream.