How much you need for a down payment depends on the type of loan and how much the house costs, but the more you can put towards a down payment, the lower your monthly payment can be and the more you'll save on interest. Conventional loans typically require a down payment of at least 5% of a home's price. FHA loans require as little as 3.5%.
Along with your down payment, you'll have to pay closing costs, or fees associated with processing and securing your loan. These can vary depending on the price of the house and the type of mortgage, but estimate between 2% and 5% of the home's value.
How much you need for a down payment depends on the type of loan and how much the house costs, but the more you can put towards a down payment, the lower your monthly payment can be and the more you'll save on interest. Conventional loans typically require a down payment of at least 5% of a home's price. FHA loans require as little as 3.5%.
Purchasing real estate is not as simple as finding the right home, submitting an offer, and signing the closing paperwork; many more steps are involved. The home buying process can sometimes be lengthy, and there may be various obstacles one needs to navigate along the way. If you’re interested in hearing all the steps involved in how to buy a house, this guide is for you!
If you are a first-time home buyer, you may also find this blog useful!
One of the most common questions we receive is, how long does it take to buy a house? Unfortunately, there is no sure answer. Each home purchasing experience is different, and no two clients are the same. Variables such as your financial history, your home wishlist, and any issues discovered along the way will certainly influence how long it will take to purchase your home.
There are a lot of financing options available. Your financing will be contingent upon how much money you have available to place as a down payment. Veterans using a VA loan, or folks who qualify as a low to moderate income household and are purchasing a home in a rural area through the USDA loan program, can purchase a home with zero money down.
Many first time homebuyers choose to finance through the Federal Housing Administration, or FHA. The FHA has a minimum down payment amount of 3.5% of the total home value. For instance, a $200,000 home would require a down payment of at least $7,000, whereas a $400,000 home would require a down payment of at least $14,000. If you’re curious how to buy a house but you have a low credit score, explore an FHA loan. The credit score requirements are more lenient with these loans.
Individuals financing the purchase of their home through a conventional mortgage can also elect to put down a small down payment, but as a result, you may need to pay private mortgage insurance each month. Private mortgage insurance will increase your monthly mortgage payments.
There are steps you can take along the way that will make the home purchasing experience more streamlined and less stressful for all parties involved.
It’s wise to start saving for a down payment as early as possible. Even if you are eligible for a loan with zero money down, or 3.5 percent, you may still want to put additional money down at closing. Remember, the more money you put down on your home, the more equity you’ll have in your home, plus a lower monthly payment.
Another step worth taking is to do a personal assessment of your finances. How much money would you be comfortable spending each month on a mortgage payment? Look at all of your bills, debt, and financial obligations. Will any debt be paid off soon, or will you carry that debt for many more years?
A good rule of thumb is to not have your mortgage payment exceed 25-30% of your annual income, but that is also entirely dependent on how much debt you have. If debt is draining your cash, you may not be able to afford a home that’s 25% of your annual income.
Now that you have a better understanding of how much money you’d feel comfortable spending each month, it’s time to see how much money a bank would be willing to lend you. If the bank is willing to lend you $300,000 for a mortgage, you and your realtor can drill down your home search for homes that are within this price range.
Just because a bank pre approves you for a certain amount doesn’t mean you need to spend that much money. If you personally don’t want to exceed a $1,500/month mortgage payment, it doesn’t matter if a bank is willing to lend you money that would equate to a $2,200/month mortgage payment. Stay disciplined and only purchase a home that is within the price range you're comfortable with.
Once you are preapproved for a mortgage, it’s time to find a great real estate agent . Ask friends or family members who they use, and if they had a pleasurable experience working with that realtor. A good real estate agent does more than just open the front door during your home tour. They educate you on the home, help identify anything you should be aware of, and will help negotiate the best price possible.
You and your real estate agent should discuss what’s important before beginning your home search. You may want/need 4 bedrooms in your home and a large garage. Or, you may be more interested in having a large backyard with an outdoor entertainment space. Whatever is on your wishlist, the realtor can help find it for you.
Common requests, such as number of bedrooms, bathrooms, square feet and price can all be built into a custom home search that your realtor can set up for you. Keep in mind the duration of time you plan on spending in this home. If you’re thinking about starting a family, make sure you take the school district into consideration. This may require you to do your own research because realtors are bound by anti-steering rules.
Once you find your ideal home, take the next step and make an offer! You and your realtor will discuss what your offer price should be. In a competitive market, you may not be able to submit a low offer. If the house has been idle on the market for a few months, start low and gradually increase if needed.
If the seller accepts your offer, you’ll likely want to get the house inspected by a professional. Although this typically costs a few hundred dollars, it’s essential. A professional home inspection will help identify issues that are wrong with the house, and can aid in negotiations. After inspection, you may also want an attorney to oversee the contract negotiations and ensure nothing is overlooked.
Read our blog that covers home purchase fees and costs here.
Your lender may require an appraisal. This simply means a professional appraiser puts a value on your home. If the appraiser values the home for $250,000 and the seller is trying to sell the home for $300,000, that’s a problem.
However, if the appraiser values the home for $325,000, and the seller is asking $300,000 for the home, you’ll kick off your loan with positive equity in the home! The purpose of the appraisal is so the bank understands the fair market value of the home and their interest is properly secured.
With the appraisal out of the way, it’s now time to finalize your loan with a mortgage company. There are many different mortgage options on the market, so be sure to evaluate all options to find the loan that's best suited for you.
If you have limited or impaired credit, or you don’t want to put down a large down payment, you might consider financing options offered by the FHA. You can purchase a home with a credit score as low as 580 and just a 3.5% down payment.
For qualifying individuals or families, the Department of Veteran Affairs, and the United States Department of Agriculture, offer financing options with no money down. Be sure to check with your lender to see if you qualify for any of these options.
Much of the loan finalization process involves a great deal of paperwork. You will likely be required to provide bank statements, pay stubs, and tax returns. Ask your lender to provide you with a checklist of all the materials you’ll need and begin gathering the necessary paperwork to help move your closing process along. Once everything is gathered and submitted, you’ll receive your final approval if you meet underwriting guidelines, and you're clear to close on the home. Congratulations!
Our Mortgage Learning Center features blogs on a wide range of mortgage and refinancing topics.
There are certainly a lot of steps involved when it comes to purchasing a home. Everyone has their own circumstances and desires, which makes the buying experience unique to the individual.
Those looking to purchase a home with no money down will need to secure a loan that is backed by the federal government, such as a VA or USDA loan. Many first time home buyers that do not qualify for a VA or USDA loan, will choose to finance their home through the FHA. The FHA makes home ownership a more reachable goal for millions of Americans. You’ll be able to get a loan with a credit score as low as 580 and a down payment of 3.5%.
Working with the right realtor and mortgage broker will help streamline the process for you. These professionals are phenomenal resources, and will answer the many questions you’ll have throughout your purchasing experience!
First time home buyers are often surprised when they learn about all of the expenses that are associated with purchasing and owning a home. After all, the purchase price and the down payment alone are just the tip of the iceberg.
Forming a solid understanding of what expenses you can expect and an estimated cost of the entire housing process can help you stay ahead financially. Becoming familiar with these expenses may also help you better understand how much money you can spend.
Plus, when you know what you can realistically afford, you can secure a loan that doesn’t become a financial burden for you later on. If you’re a first time homebuyer and you want to improve your understanding of home-related expenses, then this article is for you!
The closing costs of a home are often considered to be hidden costs because they are more expensive than most first-home homebuyers realize. Securing a mortgage isn’t as simple as walking into a bank or lending office, paying your down payment for the loan, and closing on the house all at once.
Instead, there are numerous closing costs associated with securing the loan, and these fees add up quickly. Some of the closing costs that you can prepare for include:
Generally speaking, closing costs are somewhere between 2% and 5% of the total purchase price of the home. In other words, if the home is $300,000, you can expect to pay anywhere from $6,000 to $15,000 in closing costs alone.
We wrote a whole blog just about fees and closing costs, read it here.
Unfortunately, there is no way to predict how much maintenance or how many repairs a home will need, nor is it easy to figure out what those repairs may cost. Fixing a small leak in the shower will not be nearly as expensive as replacing the roof or upgrading an entire electrical system.
Despite the uncertainty of potential repairs or renovations in your home, it’s best to assume that there will be repairs that you’ll need to make. Even though you cannot know for certain how much repairs or maintenance will cost, assuming there will be maintenance costs will make sure you are prepared for them when they arise.
Common maintenance costs include:
Before closing on a home, it’s wise to ask the existing owners for service records of these items. You’ll want to be sure that everything has been properly maintained over the years prior to your ownership. If many years have passed and the systems weren’t cared for, you can request that the existing owner pay for the replacement or maintenance of all systems before you purchase the home.
Having cash reserves for these expenses can help you avoid debt or poor financial decisions down the road. For instance, if you make sure to keep a few thousand dollars saved in the bank for unexpected house costs only, you can avoid having to put repairs on a credit card or take out a loan for the repairs. Although parting ways with cash is never exciting, it can save you a great deal of interest expenses in the future
Read about 8 budget-friendly DIY projects you can try today.
We discussed maintenance expenses associated with owning a home, but did you know there is also an upkeep expense? There’s a difference between maintenance costs and upkeep expenses.
Maintenance and repairs refer to the changes you must make to the home. For example, if there is a leak in the shower, you need to adjust the situation and either perform maintenance on the shower or replace the shower head altogether.
Similarly, if your roof has a leak that needs to be addressed or your hot water heater breaks, then those issues fall into the categories of maintenance and repairs. You have to fix these issues in order for your home to be a safe place to live.
Upkeep, on the other hand, refers to the tasks that you technically don’t have to do but you’ll find yourself doing anyway. For instance, every spring or summer, you might notice that you’re spending a few hundred dollars at Home Depot or Lowe’s buying flowers, shrubs, or mulch bags to keep your property nice. And you may need to buy a variety of tools to make that possible!
Remember that one of the greatest benefits of owning a home is the fact you can do anything you want to do. If you have the desire to change the paint color, add a vanity, or plant a garden, no one can hold you back. However, all of these desires will come at a cost
The cost of home inspections typically range from $300 to $1,000. However, this is money well spent. Home inspectors exist to identify problems in the home before you make your purchase. Make sure you are working with a reputable home inspector who has a positive rating and years of experience.
They will inspect the foundation, siding, roof, and windows of your home. Plus, they will ensure that all of the toilets flush properly. They’ll also prevent unwanted situations like leaks, gutters, or poor-quality hardwood floors and carpets. In the best case scenario, there will be no issues with the home, but they might find something worth negotiating with the seller, which will save you money overall.
If you’re not a roofer, you may have never picked up on the roof being in such bad condition. That’s why hiring a professional is a wise idea. They can pick up on issues that you might not recognize on your own so that a year down the road, you don’t end up having to deal with an unexpected expense to fix the roof.
Before going over this expense, we should take a closer look at the definition of private mortgage insurance. So, what is private mortgage insurance? Simply put, this is a type of insurance that you may have to pay to your mortgage provider.
It serves as a protective measure for the lender in case you end up defaulting on your loan. It’s important to recognize that private mortgage insurance does not protect you. Instead, it protects your lender.
However, private mortgage insurance might be avoidable, but it depends on the type of loan that you secure and how much money you put down. For example, if you’re financing your home via an FHA mortgage and you put down less than 20% in the form of a down payment, you’ll be required to pay private mortgage insurance no matter what.
Generally speaking, a PMI often costs somewhere around 1% or 2% of your initial loan value. Depending on the mortgage you’re looking to secure, your PMI payments will come to an end once you reach a point of having 20% equity. Nonetheless, this insurance is a pricey addition to the already-costly home buying process.
Utilities are an expense that renters are already familiar with, making utilities something that is not only pertinent to homeowners. However, when you take the time to factor in how much money you can comfortably spend per month on a mortgage, be sure to factor in the utility expenses as well.
With that said, homeowners look at utilities through a different lens than renters. For instance, if the home does not have great insulation in the attic, homeowners can reinsulate the attic to retain more heat in the winter and more cool air in the summer. This can cause utility expenses to drop, but it requires money upfront because it costs money to properly insulate your home.
Property taxes refer to the money you are required to put towards your town, your city, or your county. This money pays to maintain the town, including the upkeep of roads, the public school system, community centers, and town employees. Depending on where you live, property taxes can be either expensive or affordable. This is known as the town's mill rate.
Property tax is often rolled into your monthly mortgage. Either that or you’ll have to pay the town once or twice per year. If property taxes are not already a part of your mortgage, make sure you set money aside each month so that you are not hit with unexpected expenses throughout the year.
Many lenders will require that you have your land surveyed and your property appraised. In most cases, survey and appraisal fees will typically cost you a few hundred dollars.
Simply put, the survey provides the lender with a clear understanding of where the property lines begin and end. An appraisal is used to calculate the value of the home.
The appraised value of a home does not always align with what the property is being sold for. As an example, if a home is appraised for $350,000 yet being sold by the seller for $325,000, then the buyer is in luck.
Alternatively, let’s imagine a situation where a house is appraised for $325,000 and the seller is looking to sell the home for $25,000 more, resulting in a selling price of $350,000. In this situation, the bank may not provide lending for $350,000.
So, if the buyer was dead set on owning this home, then that $25,000 difference would need to come from their own pocket and they must pay that difference or get the seller to lower their asking price. Nonetheless, these survey and appraisal fees are often considered to be unexpected expenses because first-time homebuyers have never needed to consider them in the past.
A lot has changed as a result of COVID-19, and the housing market is part of that change. If you’re buying a house in 2022, do yourself a favor by keeping these advantages and disadvantages in mind.
Some of the market advantages for homebuyers include the following:
There are also disadvantages worth considering, some of which include:
A pre-approval lender is absolutely critical in today’s market, and differs from pre-qualification. A pre-approval letter informs you of how much money a lender is willing to offer you in the form of a mortgage loan.
With a pre-approval letter, you and your realtor can then look at homes that fit within your pre-approved budget. Considering how busy real estate agents are at the moment, they are often not working with people if they are not pre-approved, so a pre-approval letter is highly recommended.
Our Mortgage Learning Center features blogs on a wide range of mortgage and refinancing topics.
Despite the various unexpected expenses that you need to consider when buying and owning a house, home ownership is still a major part of the American dream, and for good reason. Having a place to call your own where you can establish roots is such a gratifying accomplishment!
If you plan on purchasing a home, make sure you consider all of the unexpected expenses that we’ve discussed above. This will help you be more prepared for homeownership, which will make homeownership that much more enjoyable and fulfilling!
One of the biggest challenges of purchasing a home is saving up enough money for the down payment. Despite popular belief, there are many down payment assistance options available to the first time home buyer that can help reduce the burden of saving up a large down payment. Down payment assistance, also known as DPA, exists throughout the United States, although the fine details vary by location. If you’re looking to purchase a home, but you’re struggling to meet that down payment requirement, read on! You may learn how to put your goal within reaching distance.
First and foremost, what is a down payment? When buying a home, a down payment is the amount of money put towards its sale price. Down payments are typically treated as a percentage of the purchase price. So, depending on how much you put down, you can reduce your borrowing amount and have lower monthly payments. Additionally, any required down payment amount is typically determined by the type of mortgage you choose.
After knowing what minimum down payment is necessary to secure the contract and financing, you may want to consider making a higher down payment. Putting down a higher down payment may help reduce your monthly payment and secure an accepted offer on a property, however you must consider if you can afford to make a higher down payment or if it would be better to hold onto those extra funds.
Making a low down payment will increase your monthly payment and can elevate your debt to income levels.
The right down payment is 100% dependent on your financial situation and goals.
First time home buyers typically put down roughly 6% of the home value. On a $300,000 home, that’s $18,000. However, there are loan options out there that allow you to put down as little as 3.5%, such as an FHA loan. Keep in mind, the percentage of down payment could be impacted by what the lender is requiring and/or what the seller would accept with the offer.
As the name suggests, down payment assistance assists first time home buyers in making a down payment on a property. There are numerous down payment assistance options available to first time home buyers.
Despite down payment assistance programs being offered throughout the country, all first time home buyers do not qualify for such assistance. There are various definitions of who qualifies for such assistance and each program may have it’s own unique requirements.
Just as there is no one size fits all to how much you should put down on a home, there is not a one size fits all to how much of a down payment grant you can get. Depending on your state, county, or zip code, you may be eligible for more, or less, grant money.
If you are exploring the down payment assistance programs in greater detail, the first thing that may stand out to you is the number of different programs and rules that exist. Why are there so many options?
The simplest way to explain all the variables is to first recognize there is not a singular government agency that oversees the down payment assistance program. States get involved, but oftentimes, such assistance programs are made on the town level.
Government bodies of specific towns may want to incentivize people to move to their town or city. Such incentives include down payment assistance options. The government is willing to offer down payment assistance as they realize the more people that move to the town, the more economic activity will trickle down, and the long term benefit will be tremendous.
There are many different types of down payment assistance options. These options include:
Grants are the most sought after down payment assistance option on the market, and for good reason. Grants are essentially free money, the homeowner never needs to repay the money they receive from a down payment assistance grant.
A forgivable mortgage is a type of second mortgage that the homeowner does not need to pay back as long as the homeowner stays in the home for an agreed upon number of years. Lenders will typically forgive these loans after 5 years, but there are of course options on the market that require a much longer forgiveness period.
Some people also qualify for a deferred-payment option on their second mortgage. These mortgages will not need to be repaid until/if the homeowner moves, sells, or refinances their original loan.
There are low-interest loans available for first time home buyers to help you cover the cost of the down payment. Once your initial mortgage is finalized, a lender may offer a second, low-interest, mortgage that covers your down payment expense. You can keep the money you were planning on putting down in the bank and you can chip away at paying back this low interest loan over the next few years.
A matched savings program is when an individual deposits money into a specific savings program, and the institution, bank, government agency, or community agency, matches what was deposited. This money can only be used for the down payment of a house, but it’s a way to reach your down payment requirement or goal in a quicker fashion.
Where do you even begin finding down payment assistance programs? The easiest way to find a down payment assistance program in your area is to talk to a local mortgage broker or real estate agency. Generally speaking, these professionals are well educated with what programs exist in their market.
You can also do your own research online. If you’re moving to a specific area, research online and see if the town or county offers any down payment assistance options. You can also call the City Hall of each specific town you’re interested in moving to and see if they are aware of any programs.
Here are some down payment assistance programs to consider:
The Chenoa Fund is available throughout the country except New York. This is an affordable housing fund that provides up to 3.5% of down payment assistance for those that qualify.
Community Seconds is approved by Fannie Mae. This assistance program allows qualified homebuyers to use money from the state and local government to assist with their down payment. Contacting your local HUD office is a great way to learn more about this program.
The US Department of Housing and Urban Development, also known as HUD, helps make home ownership possible for millions of Americans. The FHA loan is an example of a HUD program.
FHA and conventional loans are the two most popular loan options available to nearly every buyer. While it’s commonly expected that the FHA loan is for first time homeowners and that conventional options are reserved for experienced buyers with more capital, both loans have viable benefits for any type of buyer.
An FHA loan is insured by the Federal Housing Authority, which backs mortgage lenders to incentivize accessible loan options. This loan option is accessible to buyers with lower credit scores and offers down payments as low as 3.5%. Since it is a government-backed loan, the FHA loan has strict requirements about property type and condition and can only be used for a primary residence.
A conventional loan is not backed by a government agency like the FHA. Instead, it’s offered by lenders who each set down payment and interest rate requirements based on national guidelines. A conventional loan provides more flexibility for borrowers with good credit scores or cash for more significant down payments and requires less additional fees like mortgage insurance. Conventional loans can be used for many different property types, like vacation homes or multi-families.
FHA and conventional loans have their own benefits and drawbacks. Each option has different requirements when it comes to loan limits, down payments, and borrower credit score. Choosing the best option for you depends on your financial situation and history.
FHA loans are great options for buyers with lower credit scores. With a credit score of 580 or higher, borrowers will only need to pay down 3.5% of the home price (which means that a home price of $225,000 would require a down payment of $7,875 before closing costs). Borrowers with credit scores as low as 500 can still qualify with a higher down payment of around 10%.
Conventional loans are best for borrowers with higher credit scores: most lenders look for a minimum score of 620. The better your credit, the lower your down payment, which is excellent news for borrowers who don’t have much in savings but have an excellent credit history.
Both the FHA and conventional loans require a form of mortgage insurance, but the requirements and fees differ with each option.
An FHA loan requires borrowers to pay a mortgage insurance premium (or MIP) for the duration of the loan. MIP rates fall between .45 – 1.05% annually, and a one-time upfront premium of 1.75% is required as well.
Conventional loans offer more flexible options when it comes to mortgage insurance. When homeowners make a down payment lower than 20%, mortgage insurance (PMI) requires the form of monthly payments without an upfront premium. Once the homeowner pays down 20% of their home value, the PMI lifts and is no longer required, lowering the monthly payment.
Each loan type has its own limit on the amount of money that can be borrowed. The Federal Housing Finance Industry regulates conventional loan limits. Moreover, these limits can fluctuate a little each year, running at $548,250 for 2021. FHA loan limits vary based on the median home prices in each area. If you’re buying in a cheap area, the loan can be as low as $356,352. In more expensive areas, loans can reach $822,375.
A lot of things can influence your interest rates. These things can be a combination of personal factors, including your credit history, debt-to-income ratio (DTI), and your down payment. Conventional loan rates depend on these factors more heavily than the FHA loan.
While this enables FHA loans to offer lower interest rates, borrowers with excellent credit, DTI, and higher down payment amounts might get a competitive rate with a conventional loan.
A low down payment is most often associated with the FHA loan, however, both loan options provide low down payment opportunities depending on a borrower’s circumstances.
As mentioned earlier, the FHA loan offers a low down payment option of 3.5%. If you have a low credit score, lenders might ask for more money down. Borrowers can finance with a conventional loan at 3%, but only with excellent credit history and a low DTI ratio. If you want to avoid mortgage insurance, you’ll have to pay 20% down with a conventional loan.
The FHA loan is generally the more accessible option for a mortgage. It allows borrowers with a lower credit score and savings the opportunity of a lower interest rate. The FHA loan also takes into consideration the area where you live, allowing you to borrow based on the market value of the neighborhood.
A FHA loan is a great option for those with a low credit score. It’s also great for when your debt-to-income ratio does not meet conventional loan requirements.
Conventional loans bring more flexibility; and allow you to put more money down to avoid monthly PMI payments. If you have substantial credit and can put down more cash, a conventional loan may be ideal. This is because a conventional loan will keep your monthly payments low and doesn’t always require a high down payment. It can also be applied to different types of properties, like a vacation home or an investment property.
Choosing between a conventional and FHA loan depends largely on your financial situation. Both options appeal to different desires that each borrower has. If you need to put less money down and want a low interest rate, the FHA loan is for you. On the other hand, if you have good credit and you’re looking for more flexibility in your loan terms, a conventional loan may be the better option.
One of the most important steps to buying a home is deciding on a mortgage loan and deciding on a loan involves settling on a good mortgage lender. Because a mortgage loan will probably be part of your finances for years to come, it’s crucial to find a quality lender who not only offers you a good rate but helps you through the process as well
Read our beginners' guide to mortgages here.
There’s more to a lender than the loan amount and interest rate that they’re willing to offer you. Here are some other things to consider:
You’ll be working with your lender a lot throughout the home-buying process. Check out a lender’s reviews online to see what their other customers have to say. Do they answer questions promptly and pick up the phone when you need them? You’ll want to work with someone who is on your side and is willing to discuss your concerns and breakdown the fine print throughout the process.
Your real estate agent has probably seen the best and worst of what your area has to offer. Ask them if they have any lenders that they recommend or know of any to avoid.
You don’t have to choose a lender who operates right out of the town you’re considering moving to, but location can have a big influence on your communication. It can be hard to reach a lender in a different time zone, and end-of-day deadlines that occur throughout the closing process may prove difficult if one party’s 5 PM is another’s mid-afternoon
We wrote a whole blog on how to speed up the closing process, read it here.
When choosing a mortgage lender, it’s important that a lot of preparation, research, and consideration is put in place. Be prepared for the preapproval process, have a good idea of what to anticipate, and prepare your finances. Here are some steps to take when starting on your search for the best mortgage lender:
Before you start looking around for a lender, it’s ideal to make sure you have your finances in order. This can include figuring out how much house you can afford to improve your credit score, if necessary.
Your credit score is one of the best ways to show lenders that you will be able to make monthly mortgage payments on time. A solid score shows that you have paid off your past debts and that the amount of credit that you use is consistent and relatively low.
Additionally, lenders will likely look at big aspects of your finances to calculate what you qualify for, like your salary, debt, and how much you have in savings. However, they may not consider the smaller costs that add up each month or year, like paying for utilities or transportation. With that being said, it can be worth doing your future self a favor by adding up your monthly expenses and calculating how much you can afford to pay monthly towards your mortgage. Once you’ve done that, you’ll likely feel more confident about finding the right mortgage lender for you.
As a borrower, there are a lot of lender options for you to choose from. Lenders can range from your local banks to online mortgage lenders. If you’ve done any research to find the type of mortgage that you might use, it's best to take notes on the many options that are available.
To help you wade through the local lenders, online mortgage companies, and banks that offer mortgage opportunities, let’s take a look at the different types of lenders.
Direct lenders are banks, independent lenders, and online companies that provide mortgages to customers. They cover the entire process, from pre-approval to closing.
Direct lenders are great to work with because they oversee the entire process, and you can ask questions about any step of the application or about the terms and fees. However, it’s important to take a close look at what those fees entail and to get quotes from several different lenders before moving forward with one. Each direct lender approaches fees and costs differently, and you might have to read the fine print to compare how those costs break down over time.
Mortgage brokers act as a kind of third party between borrowers and lenders and work to find loan options that best match a borrower’s needs. Mortgage brokers charge a fee of the overall loan (typically between 1 and 2 percent) to either the borrower or the lender.
Because mortgage brokers don’t set the loan terms themselves, they can be great independent experts who can help lead you through the lending process without being incentivized to sell you on one specific loan option.
Correspondent lenders will process your application and provide initial funding of your loan but will then sell the loan to other companies to make a small profit. The profit made from this sale allows the correspondent lender to offer borrowers a larger range of loan types and interest rates.
The sale of your mortgage to a secondary market is very common, and the mortgages often end up in the hands of Fannie Mae and Freddie Mac, two government-subsidized companies that help maintain and balance out the ebb and flow of the national real estate market.
Wholesale lenders are institutions that don’t interact directly with borrowers. Instead, they work with mortgage brokers (which we covered above) or with banks and entities that process the application and set up the deal. Like correspondent lenders, wholesale lenders also often sell the loan to investors or other companies soon after the borrower signs.
Warehouse lenders act like the backbone of funding for mortgages and allow lending companies to take on more loans and offer different loan types. Warehouse lenders actually lend money to the mortgage company that works with borrowers and allows them to pay down your mortgage loan.
When your mortgage company sells the loan to the secondary market, they are using some of that profit to help pay back the warehouse lender.
Portfolio lenders fund a borrower’s loans from their own capital. This allows a bigger degree of flexibility for both the lender and the borrower, since the loan can be bigger and the lender can set their own regulations and don’t have to conform to sell to the secondary market.
If you’re looking for a jumbo loan or a loan that doesn’t fit within conventional limits, a portfolio lender is one of your best potential options for funding a real estate purchase.
We’ve said it before and we’ll say it again! Getting multiple options from lenders is crucial to getting a good loan. Every lender has their own fees and terms, and some will work better for your personal financial situation than others.
Even if you feel like you’ve gotten a great rate with the first lender, do yourself a favor and get a few more options under your belt before moving forward
Do you know what the differences are between interest rates and APR? Find out now!
Getting preapprovals from several different lenders is probably the best way to see what you qualify for and what different lenders offer. For a preapproval, you will probably be asked to submit some official documentation such as your social security number, history of residential addresses, income, credit score, and outstanding debt. Lenders will check your credit, but it won’t put a dent in your score.
Because lenders will do more in-depth research into your financial history once you submit an official application, you’ll want to keep your finances steady after getting preapprovals. Opening a new line of credit, for instance, could change the interest rates and loan amount that you qualify for, so it’s a good idea to avoid making any major changes before officially closing on a home and signing onto the loan
Our Mortgage Learning Center features blogs on a wide range of mortgage and refinancing topics.
Each mortgage lender is different, and that’s a good thing! It means that you can shop around and find one that works best for your unique financial situation. Doing some research on your own and looking at reviews of lenders will go a long way in helping you narrow down your options, and it will set you up to move forward on a loan that you can feel good about.
If you’re new to buying a home, you probably have quickly realized the overwhelming amount of options there are for your mortgage. To help you get your bearings as a first-time home buyer, we’ve covered the different types of mortgage programs and financing available, as well as some lesser-known tips and grants for first-time home buyers that can help you in the process of buying your first home.
Read our complete beginner's guide to buying a home here!
Before we get into the details, here are a few simple ways to gear up towards financing your first home.
Down payment amounts vary greatly based on where you buy and what mortgage loan you use, so it’s a good idea to start saving as early as possible to secure funds for a down payment and for fees that you’ll have to pay to your lender, inspector, broker, and attorney throughout the process.
Your credit score will be one of the largest factors in determining what interest rate and overall loan amounts you qualify for. Knowing your credit score will help prepare you to see your loan options. If you have a low credit score or if your score recently dropped, be ready to have an explanation for lenders.
Don’t just get one quote: shop around for your lender! Because a mortgage loan will have a lasting impact on your finances, it’s crucial to have some options to compare and to know which type of loan you can afford and which lender works best for you
While conventional loans typically require high down payment amounts and excellent credit scores, there are other options that might be more accessible to first-time buyers.
The FHA loan is perhaps one of the most accessible and popular types of government-backed loans. The FHA mortgage is offered through traditional lenders but is secured by the government, which allows to offer down payments as low as 3.5% and lower interest rates. It’s a great loan for first-time home buyers because of its accessibility and competitive interest rates.
Veterans looking for mortgages for first-time homebuyers may want to consider the VA loan. The VA loan is offered to military veterans or active service members and offers incredibly low interest and down payment rates. It’s important to note, however, that both the FHA and VA loans come with specific requirements for each property concerning structural integrity and livability: the house must have running water, for example, and must meet other HUD requirements before it can be purchased under the loan.
The USDA loan is a great option for buyers who are looking for remote land. Each state has predetermined rural areas where homes or property can be bought with the USDA loan for lower interest rates and options for small down payments. USDA loans can be used for primary residences but can’t go to vacation homes or rental properties.
Native American Direct Loans (NADLs) offer additional loan opportunities for those who qualify for a VA loan and identify as Native American. To qualify, you must be a Native American enrolled in an American Indian tribe or Alaskan Native village that has set a MOU (Memorandum of Understanding) with the VA.
These private entities buy up mortgages from private lenders across the country, and therefore assume that debt-to-be-paid and risk. This allows lenders to offer those lower rates without having to assume high risks when someone defaults on their payment.
In addition to government-backed loans that provide low rates, you’ll find various programs and options designed to help first-time home buyers with down payments and low rates.
One of the most common assistance program options is down payment assistance, which helps cover a home buyer’s down payment amount through different types of loans or grants.
If you anticipate struggling to make a large, one-time deposit for a down payment, your lender may allow you to take out a second mortgage at the same time as your first to help cover the cost. Other options include loans with deferred payments due later during the loan term or when you move or want to refinance. These loans can help offset upfront costs, but require some thinking ahead since they do have to be repaid at some point.
There are also programs which offer grants that don’t have to be paid back. These grants often change based on local government and funding and don’t have to be repaid. There are also options for forgivable loans, which function as second mortgages but have a 0% interest rate and are forgivable if you can stay in the home for a set amount of years.
The Good Neighbor Next Door program gives teachers, firefighters, police officers, and emergency service technicians up to 50% off the sale price for homes in designated “revitalization” areas. After getting pre-approved, applicants are matched with an advisor who helps them find a home where they must live for 36 months to maintain eligibility.
The Good Neighbor Next Door program is highly competitive, but is a great option for those in teaching or public servant positions who need assistance finding an affordable mortgage.
HomePath homes are homes that are offered for sale after the buyer defaulted on a mortgage owned by Fannie Mae. Not only are these homes offered for a discounted price, but they come with closing cost assistance of up to 3% of the home’s sale price if the buyer takes an online home-ownership course.
There are also several nationwide nonprofit organizations specifically for first-time homebuyers who need down payment or mortgage assistance.
Habitat for Humanity provides housing specifically to those living in poor living conditions or who have a mortgage or rental costs that they cannot afford. The organization provides affordable mortgages in exchange for volunteer time spent improving properties for others.
Neighborhood Assistance Corporation of America helps eliminate costs for closing, down payment, and fees for eligible applicants in both urban and rural areas across the country
Our Mortgage Learning Center features blogs on a wide range of mortgage and refinancing topics.
It can be hard to look for affordable options when looking to buy a home for the first time. Researching local options and reading about programs through the HUD website for your local area can help provide options for homeownership. Finding a good realtor will also help, since they may know of programs local to your area that work specifically for your situation.
To learn more about the homebuying process, head to our Learning Center. You can also contact us for a personalized rate today to begin the search for your new home.
At the beginning of the COVID-19 pandemic, toilet paper was the hottest commodity. While that has changed over the course of the viral outbreak, a piping hot housing market has taken its place. We’re more than halfway through 2021 and the housing market is showing no signs of cooling off.
The market is a lot different from what we are used to because a lot has changed. Should you buy a house right now? What should you expect during the purchasing experience? We’re glad you asked! We have the answers to these questions and more.
Figuring out if now is the right time to buy a house isn’t an easy question to answer. There are so many variables that must be factored in before you can fully understand whether or not now is the right time for you.
Nowadays, interest rates on mortgages are near all-time, unprecedented lows. The lower your interest rate, the less your monthly mortgage payment will be and the more money you will save over the term of your loan. But how much can you really save with a 0.5% difference? Well, it’s actually a lot!
Option 1Option 2Purchase Price$300,000$300,000Down Payment$60,000$60,000Mortgage Length30-years30-yearsProperty Tax$2,500/year$2,500/yearHome Insurance$1,200/year$1,200/yearInterest Rate (Fixed)3.25%3.75%Monthly Payment$1,353$1,420Monthly Savings$67 30-year Savings$24,120
Without question, lower interest rates are playing a role in motivating people to purchase a house in 2021. But it’s not the only factor.
With remote work becoming increasingly more popular, people no longer need to live near their places of work, which are often within city limits. In turn, waves of people are leaving cities in search of somewhere to live in the suburbs. That means a lot of people are purchasing homes at greater rates than ever before, thereby increasing demand while decreasing supply.
However, the basic economic rule of supply and demand is no stranger to the housing market. Since homes are in greater demand, the prices of homes are skyrocketing. Therefore, although you’re saving money with a lower interest rate, you might end up paying anywhere from 15% to 25% more for a house in 2021 than what it would have sold for pre-pandemic.
Your personal finances will play a vital role in determining whether or not you are eligible to purchase a home. Factors such as your debt-to-income ratio, your credit score, your employment status, and the amount of savings you have will heavily impact your home buying eligibility.
Not only do you need to meet the loan requirements, but you’ll also need to have enough money for a down payment. Depending on the financing route that you choose to pursue, you’ll have to put down anywhere from 3.5% to 20% on your home. Closing costs, which range from 2% to 5% of the purchase price, must be taken into consideration.
(IMAGE PLACEHOLDER)
The sizzling hot housing market has changed the purchasing experience as we once knew it. Here are some of the most noticeable changes thus far.
There’s a lot depending on the appraisal process. In order to get approved for a loan, the house must appraise at or above the desired loan value on the home. If the house appraises for less than the desired loan value, which is how much money you are asking to borrow from the lender, then you as the buyer must make up the difference.
For example, if the house costs $300,000 and you planned on purchasing it with a 10% down payment, you’d need a loan for $270,000. If the house is appraised for $250,000, then you’ll need to either walk away from the deal or make up the $20,000 difference with a larger down payment.
Depending on what type of mortgage you’ve decided to use, you may have to make a huge down payment in order to close on your home of choice.
According to a recent survey led by the National Association of Realtors (NAR), sellers are less likely to accept offers that aren’t conventional loans.The survey found that only 30 percent of homebuyers using a government-backed loan had their offer accepted compared to the 89 homebuyers with conventional financing. With that being said, conventional loans typically require a 20% down payment or private mortgage insurance. As for government backed loans, down payments are usually lower.
A pre-approval letter tells sellers that you are ready, willing, and able to purchase a house. Given the competitiveness of the current real estate market, real estate agents may not be willing to work with you unless you have been pre-approved for a mortgage.
Additionally, if you were to find a real estate agent willing to work with you, it’s possible that you’d get outbid by another potential buyer who is closer to the point where they can close on the deal when you’re not.
(IMAGE PLACEHOLDER)
Let’s compare some of the advantages and disadvantages of purchasing a home in 2021.
Some of the most common advantages homebuyers have in today’s housing market include the following:
Just as there are many advantages of the current housing market, there are also many disadvantages. Let’s take a look at two of them.
Without question, 2021 has been a year like no other for the housing market. Folks are leaving the cities in favor of the suburbs, and they are fleeing city life rapidly. This mass migration is causing the most basic economic rule of supply and demand to kick in, and house prices are quickly on the rise!
Despite the prices of homes increasing at a rapid rate, buyers are still purchasing homes. These buyers no longer need to live in or near the city as their place of employment lets them work remotely. Additionally, apartment living just isn’t as comfortable anymore because the kitchen table can only function as a legitimate office for so long. People want more space, and they are finding that space by purchasing a new home in 2021.
One of the most important parts of preparing to buy a home is having a solid credit score. Building up your credit over time shows that you’re capable of paying off a mortgage, and it’s one of the largest factors that impacts your interest rate. If you’re wondering what credit score is needed to buy a house, read on to learn more about how it works and affects your mortgage loan eligibility.
A credit score is a number ranked between 300 and 850 that represents an individual’s creditworthiness. It can be impacted by factors such as how much credit is used, how much credit is available, number of inquiries in the last 12 months, how many lines of credit are open, outstanding loans or debt and the proportion of loan balances to loan amounts, and any late payments to credit cards and loans.
Each different type of home loan comes with different credit score requirements, which we’ll cover more in detail below. To get a favorable rate on most loans, it’s important to have a credit score of at least 600 or higher and to have a score of at least 650 for conventional loans. The higher your credit score, the more options and amenable rates will be available to you.
Here is one breakdown of how credit rates are categorized when it comes to eligibility for mortgage loans:
(source: UFCU)
In general, borrowers need a minimum of 580 to be eligible for an FHA loan, with requirements typically running higher around 620 for a conventional loan.
While you might be able to qualify for a mortgage with a lower score of 580 or 620, a higher score will give you more options for financing and much lower interest rates. As you prepare to buy a home, building up your credit will be advantageous no matter what type of loan you plan on using.
Your FICO score is the commonly-used official credit score used by lenders to determine your mortgage eligibility. It takes into account five areas of creditworthiness: payment history, current debt, credit history, types of credit, and new credit accounts.
Lenders typically look at FICO scores from any or all of three different credit bureaus: Experian, Equifax, and TransUnion. Each bureau uses a slightly different form of the FICO method to produce its own version of the score, which is why lenders like to cross-reference them when considering your application.
While unemployment rates have risen due to the impact of COVID-19 on the United States and countries around the world, credit scores are doing well and continue to rise nationwide. If your credit score has dropped due to unforeseeable consequences of COVID-19, consider contacting your lender, bank or credit card company to ask for deferment options for your payments. Deferment or forbearance on loans or money owed allows you to delay payments and is not reported as a late payment to credit bureaus.
In an effort to help those who have previously served or who are active service members of the military, the Department of Veterans Affairs does not carry a strict credit score requirement for VA loan applications. Private lenders that offer the VA loan do still have their own credit requirements with a typical minimum of 580, but make sure to shop around for several options to get a low rate.
Credit score isn’t the only aspect of your credit history that lenders will look at when reviewing your application.
The amount of credit that you use month-to-month is one way that lenders assess your financial stability. Using a healthy amount of credit without maxing out your limit or letting payments go overdue generally tells lenders that you will be able to make on-time mortgage payments.
Government-backed loans are great opportunities for applicants with lower credit scores. An FHA loan can go to buyers with scores as low as 580 (although you may be required to pay a larger down payment percentage than the traditional 3.5%). VA and USDA loans also offer lower credit score requirements, although meeting a minimum score limit is still required by lenders.
Lenders may consider applicants with lower credit scores on a case-by-case basis. If you apply for a loan with a low credit score, you have a few options. Lenders will sometimes allow you to find a co-signer, who will sign the loan and assume all responsibility in case you default on your payments. You can also look into DPA (Down Payment Assistance) programs, which sometimes offer assistance to applicants with low credit scores.
It’s also important to remember that a bad credit score isn’t permanent. By taking time to make regular payments and pay off outstanding debt over time, you can build your credit score up in order to qualify for lower interest rates.
While credit score limits are set by each independent lender, here are the goalpost credit limits for well-known and popular loan types:
Loan Type
Minimum Credit Score Requirements
Maximum Loan Amount
Average Interest Rate for 30-year loan
(as of 4.14.2021)
FHA with 3.5% down payment
580
Varies based on the median income in the geographic area, from $356,362– $822,375
2.940%
FHA with 10% down payment
500, but private lenders may require higher
Varies based on an area’s median income, from $356,362– $822,375
2.940%
Conventional
620
Varies based on the median income in the geographic area, from $548,250 to $822,375
3.250%
Jumbo loan
680
Anything above an area’s conforming loan limit, from $548,250 to $822,375
3.000%
USDA loan
None, but 640 is preferred
$285,000
2.380%
VA loan
None, but 620 is preferred
$548,250
2.525%
(Source: CreditKarma)
What credit score is needed to buy a house? The answer can depends on a variety of things such as entirely on what type of loan you are eligible for and interested in. Your credit score is one of the bigger factors that determines your goes into your approved interest rate with different lenders. However, if your score is less than stellar, there are some loan options with lower minimum score requirements. You can also make regular payments to improve your credit slowly over time in order to qualify for better rates on your mortgage.
Working with a mortgage lender can help you find out what options are best for you. At ZeroMortgage, we aim to make sure the mortgage process leaves you feeling like a rockstar. To learn more, check out our learning center or get in contact with one of our experts.
Buying a house is one of the most important investments you will ever make. Your home will be your safe place and your sanctuary from the outside world.
Are you wondering if you can buy a house with bad credit? You may have thought that bad credit or other credit issues would mean that you can’t buy a home, but that simply isn't true!
In this article, we'll show you how to buy a house with bad credit. We’ll also introduce you to various home loans designed for people with bad credit so that you can build solid ground and start working towards your future today!
Even so, we’re sure that you've heard all of the homebuying horror stories. And while those things happen, they don't have to be part of your story. We'll show you how home loans for bad credit can make home ownership a possibility no matter your financial situation or credit history.
Yes, you can buy a home with bad credit. You just need to know how to go about it. There are many home loans available for people who have bad credit scores.
If you have a credit score of at least 620, then you can apply for home loans like the ones offered by FHA and VA. These two government-owned loan options come with much looser requirements than those of traditional lenders like banks and mortgage companies.
To buy a home with bad credit, you'll need to have a FICO score of at least 620. Your home loan's interest rate will be a lot higher if your score is any lower than 620.
If your FICO score is lower than 620, you may be able to ask homebuyers with a higher credit rating for help. They can act as joint borrowers, and the homebuyer’s payment will need to be divided according to their share of ownership.
The homebuyer must agree that this offer is entirely voluntary on their part, so make sure they understand what they agree to before signing any papers!
The amount of money that you can afford to put down is determined by how much the home costs and how much of your income you can put towards your monthly mortgage payments. You must also consider your existing debt obligations like car loans, student loans, or credit card debts.
These are called “debt ratios,” which lenders use to determine if they are willing to offer you a home loan given your credit score. The lender may inquire about comparable homes that were recently sold nearby during their appraisal process because this gives them an idea of the price range that would be considered reasonable for you based on recent sale prices in your area.
One of the most important steps of buying a home is coming up with the money for your down payment. The money you pay in the form of a down payment is used to buy a home, but the money doesn't have to be paid directly out of your own pockets.
Some people secure loans for their down payments, while others take on debt from family members or friends. You can apply for FHA loans with a credit score between 500 and 579. You’ll also need to pay a minimum down payment of 10% unless you have a credit score above 580, in which case you can likely pay a 3.5% down payment.
The debt-to-income ratio is one of the most important ratios to consider when applying for a home because it can greatly affect your eligibility. If you're self-employed or you have other sources of income that are harder to quantify, talk with lenders about their specific guidelines before applying.
Lenders will consider the length of your work history and how long it has been since you have paid off your existing debt balances. Some lenders will require that the applicant has a history of work prospects extending at least one year, with a minimum of two years' worth of employment history if it has been less than five years since they last worked.
All in all, it's important to seek out new employment opportunities to remain in good standing with lenders. If you are planning to quit your job, make sure your current employer agrees to let you leave on good terms so that you don’t risk their business because that would reflect poorly on you when it comes time to apply for a home.
There are many home loan options for buyers with bad credit. It just takes a little patience and extra time to find the right one. Seeking the assistance of professionals will help in this situation.
Buyers don’t have to give up on their dreams of home ownership just because their credit scores aren’t perfect. There are many options available, and it’s worthwhile to conduct research before giving up hope!
Some people believe that home ownership is a natural right. But with home prices at an all-time high, it can be hard to purchase your own home all on your own. Even so, where there’s a will, there’s a way, and it’s possible to buy a house with bad credit.
Here are some tips to keep in mind!
Home loans from the Federal Housing Administration (FHA) are a great opportunity to buy a home with bad credit. Homebuyers with good credit scores may not get the best deals that FHA offers, but they can still enjoy the benefits that come with an FHA loan.
The monthly mortgage payments of FHA loans are usually lower than other mortgages as a result of competitive interest rates. Mortgage insurance is cheaper with FHA loans, and there is an upfront premium that lasts for twelve months, at which point it goes away permanently, meaning you don't have to pay this premium every month like other types of home loans.
FHA home loans require homebuyers to pay for mortgage insurance for the duration of their ownership of the home. This requirement is something that other types of home financing don't have.
There are special programs available for military personnel, doctors, nurses, teachers, and government employees. These programs offer various benefits, including fewer down payment requirements or lower monthly payments because these folks often earn less than the average American family.
The Veteran Affairs (VA) home loan is a type of financing that can be used by veterans, active duty military personnel, and qualified spouses to either buy or build a home. While the program offers far more advantages for eligible borrowers than traditional home loans, there are some drawbacks as well.
For starters, service members don't have to pass credit checks to qualify. So, this means that if you've experienced difficulties getting approved for other types of mortgages because of your poor credit history, you can still qualify for a VA loan as long as you hold an active duty status in the military.
Regardless, it's important that you don’t solely rely on your VA benefits when applying for mortgage approval since it might result in an unfavorable outcome due to your high debt ratio.
In addition, there are instances when homebuyers have been denied VA mortgage loans because of a lack of good credit history.
For example, recent veterans or those discharged from the military without any prior service time are ineligible for a VA home loan if they cannot provide any proof of previous conventional mortgage experience. An adequate debt-to-income ratio is required as well.
You'll also want to make sure that you are aware of the down payment requirements, which you can better understand by speaking with your lender. You’ll want to look into the requirements for a VA home loan before committing to one home loan in particular, too.
For instance, some homebuyers may find that paying upfront will result in them being able to buy more houses than they’d be able to buy with other home loans. But again, keep in mind that the homebuyer must be a veteran, active duty military personnel, or a spouse of a military personnel in order to qualify for a VA home loan.
If you're unable to qualify for a home loan because of your credit history, there are still options out there that can make it possible for you to purchase a home. The government has created assistance programs that are designed for people with less-than-perfect credit scores and finances.
While they may not be the best types of home loans, they do offer some relief for people in tough financial circumstances. These programs include HARP and MCCP.
Home Affordable Refinance Program (HARP), which allows homeowners who meet certain criteria to refinance their home for better rates
Mortgage Credit Certificate Program (MCCP), which lets qualified buyers purchase homes without putting any money down and instead adding funds into an MCCP account.
There are some state programs designed specifically for those who have less than perfect credit histories. For example, in California, the CalHFA Down Payment Assistance Program provides funding assistance to homebuyers who qualify as moderate-income households. The program is also available to those who live within areas that experience high levels of poverty and other underserved communities throughout California's 13 investor-owned utility services territories.
You should also consider looking at smaller lenders like local banks and non-profits because they give people more leniency than big-name home loan providers. The bottom line is that there are many options available to homebuyers who have bad credit.
Even so, those options might not be your best bet if you're looking for top rates or security from one of the large home loan companies. But then again, sometimes it's worth taking what you can get when times are tough and make home ownership possible via these options.
You can visit different home lending websites to see which mortgage programs are available. Once you find the option that suits your needs the best, be sure to grab it right away! This will make it a lot easier for you when dealing with lending institutions because they’ll know what type of home loans you're looking at based on your previous search history or inquiries made online.
Real estate agents also have ways to offer potential homebuyers financing options from lenders who specialize in these situations. If possible, ask about other resources, like grants or local assistance programs, which homebuyers with bad credit can also benefit from.
If you're looking to buy a house but you’re worried about a bad credit score, we can help. Buying a home is one of the biggest investments most people will make in their lifetime, so it makes sense that many buyers are willing to do whatever they need to do in order to purchase their dream home.
For those with poor credit scores who think they may not be able to qualify for traditional financing options, like mortgages through banks and other lenders, don’t worry. There are still many ways by which you can buy a home with a bad credit score.
We hope this article has helped clarify what types of loans might work best if you want to purchase your first property! Have any questions? Send us an email for support.
*Does not apply to third party fees and closing costs.
Chicago Mortgage Solutions LLC, DBA, ZeroMortgage, NMLS 7872. 1051 Perimeter Drive, Suite 670, Schaumburg, Illinois 60173. 847-999-RATE. Chicago Mortgage Solutions LLC is licensed in the following states: AL, AR, AZ, CA- Licensed by the Department of Financial Protection and Innovation under the California Finance Law License., CA- Licensed by the Department of Financial Protection and Innovation under the Residential Mortgage Lending Act, CO, CT, DC, DE, FL, GA- Georgia Residential Mortgage Licensee., IA, IL- Illinois Residential Mortgage Licensee., IN, KS, KY, LA, ME, MD, MI, MN, MS, MT, ND, NE, NC, NH, NM, NV, OH, OK, OR, PA, RI-Rhode Island Licensed Lender, SC, SD, TN, TX, VA, WI, WV and WY. All Loans are Subject to Credit and Property Approval. “THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER”. Equal Opportunity Housing Lender.
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