Best Mortgage Lenders for First-Time Buyers With Bad Credit?

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The Best Mortgage For Bad Credit

What are the best mortgage lenders for first-time buyers with bad credit seems like a great question. But it’s not. Because no matter how good a lender is, bad credit is expensive. Also, because it gives an incomplete answer, no matter what.

Full disclosure: To keep the lights on at Home Loan Mine, many of the links in this blog post are affiliate links. If you register with the websites, through my links, websites that I’ve vetted this week, I’ll earn a small commission each time. Maybe enough, if a few dozen people do it too, to buy myself a spiffy summer jacket.

The questions first-time home buyers with bad credit should ask, if they want to get a loan with better rates are:

  1. How do I increase my scores fast?
  2. What mortgage programs are there for first-time home buyers with bad credit?

The second question might make you feel I’m splitting hairs, but I’m not. There are significant real differences. So, let me explain.

Lenders (the good, the average, and the bad ones) have many loan programs, some more than others. Not all of them have the same program, though they could have more than one that’s good for first-time home buyers, or for buyers with bad credit.

Full disclosure: If you sign up through this link, I will earn a small commission, paid by Max Bounty. I’ve vetted offers right before publishing this article and came to the conclusion that this one is a solid one.

If you’d like to stay on top of your credit and even improve it, you find your credit scores to start.

But programs are meant for particular group of people. You can end up with a good lender that has a program for first-time home buyers with bad credit that’s good for many people, but not you. You just do not fit that particular program to perfection.

Which means, that lender will get you a mortgage under their program, and that will be the best thing they can do for you, without being the best thing you could have done for yourself.

You need to shop around, approach several lenders that have programs for first-time home buyers with bad credit and see what each of them can offer you. Ask them to make you their offer at about the same time, otherwise you’re not comparing apples to apples. (Mortgage interest rates change often, sometimes two or three times a day.)

The Best Mortgage Lenders for First-Time Buyers With Bad Credit: The Big Issue

Best Lenders For First-Time Buyers With Bad Credit

The best mortgage lender for first-time buyers with bad credit who has the best program for you is still not the best thing you can do for yourself. The best thing you can do for yourself is to increase your scores, even if that means waiting a couple of months.

Because there is a big difference in the terms you get if your scores are bad vs if your scores are good… or even average.

Sometimes, there is nothing you can do to improve your scores quickly. Quite often, there is. It requires effort on your part and money.

Full disclosure: If you sign up through the link in the next paragraph, I will earn a small commission, paid by Max Bounty. However, I’ve vetted the offer thoroughly right before publishing this article and came to the conclusion that this one is a solid one.

If you’d like to stay on top of your credit and even improve it, you find your credit scores to start.

The effort part: you must check your credit report to make sure there are no mistakes. I have seen credit scores shoot through the roof when some mistaken facts were removed from the reports.

The money part: often, people’s scores are low because they used too much of their credit. Paying off a card or 4 fixes that.

How many cards you must pay down (or off) can be determined easily by people who can run what-if scenarios for you. The best situation to find yourself in is to have $10 or some other similarly low amount on a card and nothing on the other cards you have.

The closest you can come to that, the higher your scores will shoot.

Since there are other factors that determine your scores, you will never go from 580 to 800… But you can go from 580 to 642, for instance. And, at 640 and higher, you have far more options.

Under 640, you’re limited to Government programs, FHA, VA, USDA. You can buy houses with them and you can buy houses that need work too. But they have drawbacks. (VA is only for current or former members of the military and their spouses, USDA loans are not available in all areas and are limited to people who earn less than the average income for the area; the FHA has mortgage insurance that’s more than that of conventional mortgage loans.) In case you wanted to buy a house and get the funds to fix it up, here’s the FHA 203K loan process.

Full disclosure: If you sign up through the link in the next paragraph, I will earn a small commission, paid by Max Bounty. However, I’ve vetted this offer thoroughly right before publishing this article and came to the conclusion that it is a solid one.

If you’d like to stay on top of your credit and even improve it, you find your credit scores to start.

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