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Mortgages For Bad Credit
If you want to buy a new home but you’ve got bad credit, you’re not alone. About 30 percent of Americans have poor or bad credit. Credit problems can have a significant impact when it comes to buying a home.
It can be difficult to find a mortgage at all for many borrowers; other prospective home buyers may be required to pay higher interest rates on the loans they can obtain, or to put down a larger down payment on the home they wish to buy.
However, there are many lenders out there who specialize in providing home loans to borrowers with bad credit. What is the best mortgage company for bad credit? Let’s take a look at some of the options you might have to get a mortgage if your credit is less than stellar.
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Best Mortgage Lenders For Poor Credit
Look through our list of the best mortgages for low credit scores below and take a good look at what they have to offer.
List Of The Best Mortgages For Bad Credit:
If you have bad credit and you need a mortgage you should definitely consider Vylla. Vylla, powered by Carrington Mortgages (CM), provides mortgages to borrowers with credit scores as low as 500, through government-backed loans such as FHA, VA, USDA loans.
Vylla also provides adjustable-rate mortgages (ARMs) as well, which are very hard to find with poor credit mortgage lenders.
Vylla’s government-backed loan also doesn’t require mortgage insurance (PMI) for smaller down payments, lower credit scores, and/or higher debt-to-income (DTI) ratios.
However, the platform doesn’t allow for online loan pre-approval and their website is a bit old-fashioned.
Greenbox Loans is another mortgage option for borrowers with bad credit. This mortgage company accepts applications of borrowers with credit scores as low as 500, as well as people who have had short sales, foreclosures and/or bankruptcies.
They also allow different sources of down payment, including from family members, employer-assistance programs, and secondary financing. However, perhaps in order to address the greater risk they take, Greenbox’s lowest interest rate is 5.75% and the company still requires a 15 percent down payment, which is much higher than most government-backed loans.
Additionally, much like Vylla, Greenbox Loans’ website is poorly laid out and confusing to navigate through as well.
Another mortgage lender that specializes in borrowers with bad credit is Northstar Funding. Northstar Funding will work with borrowers who have credit scores as low as 500 and even will provide loans to borrowers with past foreclosures and bankruptcies.
This innovative lender provides a great deal of income flexibility to borrowers too, with its one-year tax return, rental income, and self-employed alternative income loan products.
The down payments on many of their loans can be as low as 5 percent. However, if you already own and occupy the home ad seeking to refinance, Northstar Funding does not do cash our refinancing.
Another innovative lender worth checking out is Rocket Mortgage, by Quicken Loans. Rocket Mortgages serve borrowers with credit scores as low as 580 and provide FHA, VA, and USDA-backed mortgages as well.
You can find out if you’re approved for a loan in minutes, and this is one of the best companies to work with if you prefer to do most of your work online or remotely; Rocket Mortgages, with your authorization, can even do most of the tiresome legwork of putting your financial statements together too, which will save you a great deal of time.
However, you will need to have a minimum of 580 credit score to be approved for a Rocket Mortgages home loan; the company does not look at any alternative data during its loan approval process.
Additionally, Rocket Mortgage does not offer home equity loans or home equity lines of credit (HELOCs) either.
Navy Federal Credit Union
Another great lender to consider if you have bad credit and are looking for a home loan is Navy Federal Credit Union. Navy Federal will lend to borrowers with credit scores of 580 or higher and many of their loans require no down payment.
They provide conventional, VA, FHA, jumbo, and interest-only loans, with adjustable and fixed-rate terms. You can also obtain online pre-approval for your home loan through their website as well. However, other than the pre-approval option, their website does not provide a great deal of information about the loan rates you could be eligible for.
Additionally, since Navy Federal Credit Union caters to the military and national defense establishment, its membership is limited to military personnel, veterans, and certain federal employees and contractors.
Best Mortgage Companies For Bad Credit: Parting Thoughts
Even if you have poor or bad credit, you can still buy a home. There are many lenders out there who recognize that your credit score isn’t the only thing that defines you financially and is more than willing to provide home loans to people who need them.
Each one of the lenders discussed here has its own advantages and drawbacks. So, review each one, and find a home loan provider that suits your personal needs today.
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