How to get a Less Than Perfect Credit Home Loan
Getting a less than perfect credit home loan will depend on a number of factors, the first being how much less than perfect your credit is. Obviously, the better your credit rating, the easier the loan approval process will be and the lower the interest rates you will receive. But if you're credit isn't perfect, it's the not the end of the world, and there are many options available to you in finding lending for a less than perfect credit home loan.
Slightly Less Than Perfect Credit Home Loans
Before applying for any loan, you should a copy of your credit report and credit score. In general, a credit score of 760-850 is considered good (with 850 being perfect). If you have less than perfect credit in this range, as long as you have enough income, you should have no problem receiving a home loan with good interest rates.
Above Average Credit Mortgages
A credit score of 725-759 will put you in the "above average" group of less than perfect credit scores. People with scores in this range still should have little problem being approved for mortgage loans. Although qualifying for the lowest interest rates available is not always possiblew hen your credit is slightly less than perfect, lenders should still offer you low to average interest rates.
Average Credit Home Loans
Your credit is considered average if your credit rating comes out between 660-724. Credit ratings in this range should allow you to be approved for a home loans with middle-of-the-road interest rate levels. Like with above average credit, you probably won't be able to qualify for the best interest rates.
Below Average Mortgages
If you credit score is below 660, many lenders will classify you as having poor or bad credit. A score between 560-659 is considered "below average". While being approved for below average credit home loans is possible, you can likely expect to deal with interest rates than are much higher that the loans given to people with perfect credit.
Way Less than Perfect Credit Home Loans
Any credit score below 560 is considered to be bad, and getting approved for a home loan can become more difficult. The best way to be approved for a bad credit home loan is to get your credit as stable as possible before applying for a loan. Lenders will work with people with bad credit, but you must have documentation to show that you have the income to cover the payments on any loan they might issue. You can also expect to receive outrageous interest rates, which can make your monthly payments sky-high.
With any less than perfect credit home loan, you credit rating and score is only one factor that lenders will look at. Your recent credit history and level of income will also be huge factors in determining your interest rate and whether you will be approved.