July 19, 2019 by Andersonedward
Houses are quite expensive, and most homebuyers could not even dream of buying them without the help of mortgage loans. The affluent homebuyers can easily buy homes by either paying the purchase price in full or managing the monthly mortgage payments. The mortgage loans are available for both homebuyers wanting to change their existing homes and also newly married couple wanting to buy their first home.
The newly married couples are first time homebuyers who rely on government backed loans due to moderate income and financial constraints. The homebuyers struggling with bad credit scores and still wishing to buy a home must consult 500 credit score mortgage lenders Houston. Credit scores are the most important factor that decides the approval of loans. The lenders use credit scores to judge the creditworthiness and ability of the homebuyer to repay the loan on time or not. The credit scores are determined by FICO (Fair Isaac Corporation) and range from 300 to 850. The scores above 670 are considered to be good and acceptable while scores below 600 come under low credit score. The credit score from 579-500 is considered bad credit and shows a person has missed debt payments for several months.
The 500 credit score mortgage lenders Houston offer the government backed loans such as Federal Housing Administration (FHA) loans and Veteran Affairs (VA) loans which are known for simple and easy loan requirements. The FHA is regarded as best home loans for first time homebuyers with poor or bad credit as they mostly fail to get conventional loans. The homebuyers with bad credit score (579-500) only have to pay a 10% down payment to obtain the FHA loans. The interest rates of FHA loans are also less as compared to other mortgage loans
The VA loans are ideal for veterans, their spouses, and currently employed servicemen. The VA loans do not even require any credit score, no down payment, and no mortgage insurance. The homebuyers can choose either 15 year or 30 year home loans according to their income and expenses. The 500 credit score mortgage lenders Houston offer the FHA and VA loans because these loans are insured by the government, which reduces the risk of the lenders if the homebuyer default on the loan amount. The homebuyers, however, have to fulfill certain additional requirements which are
Ø Tell the reasons that resulted in bad credit score
Ø A regular job and a high monthly income
Ø Have a low debt to income ratio
Ø Have no outstanding debt; and
Ø No late debt payments for the last 12 months.