In order to receive home loan as the best interest is very difficult task, because it required a good credit score. But we can see there are most of the people who generally missed their payments as well as make their credit score bad. They suffer a lot due to this. However, after this also there re some ways through which you can get the home loan. Hence, many people want to know about Can You Get Home Loan 600 Credit Score?
Can You Get Home Loan 600 Credit Score?
Even if you are not having a good credit score there are few methods due to which you can apply as well as get the home loan process done. Well if you have a credit score around 600 then you do not need to go to FHA for the home loan process. With the help of the non-government-insured financing you will easily get qualifies for this process. However, there may be many cases under which you may be required to use a product like an Adjustable Rate Mortgage (ARM). There are various lenders who have relaxed down payment requirement.
With a little down payment of the 5% they allow you for the home loan process. However, you are required to pay the PMI until you’ve paid off another 15% of the mortgage, but it drops off. Through this you can easily get qualify for the higher debt income ratio. The previous cut off was 41% or less. Now you can qualify as long as your DTI is between 45% and 50%. Well FHA will be the best option for you in these circumstances.
Understand what qualifies as a bad credit score:
However, lender may approve for a home loan if your credit score is at least 620. In any case if it is 600 or lower, you will likely have a more difficult time qualifying for a mortgage. Moreover, you cannot qualify for the certain loans, such as a Federal Housing Administration (FHA) loan, which usually approves individuals with credit scores of 600-500. Your credit score is only one available factor.
Maintain a steady income:
Before you receive your loan from the lender they will take into account your ability to pay your current expenses on time. Well if you are self employed then it is essential for you to maintain a steady income source. Thus, the respective lender must be willing to provide you the mortgage.
Be prepared to pay more interest on your mortgage:
If you are having a bad credit lenders may offer you sub-prime mortgage. Lenders may charge higher interest rates on sub-prime mortgages to compensate for the higher loan default risk they are taking on the mortgage. However, the difference in the interest rate can be like for 760 credit score and someone with a 620 credit score could be 1.6%.
Look into a Federal Housing Administration (FHA) loan:
However, if you are having bad credit score. You can look into the FHA. These loans can have down payments as low as 3.5% and are often available for individuals with credit scores between 500-620. You can only have one FHA loan, and you can only get the loan on a property that is occupied by the owner. Moreover, the lending bank make the financial decision not FHA. You should also establish a steady income over a period of two to three years to get the home loan. As well as you can also look into of the VA loans.
Find a co-signer for the mortgage.
You can ask your friend or any family member to co-sign a mortgage for you. However, if monthly mortgage payments are too high for your budget, you may end up entering into a co-sign agreement for a home you will lose in a year. Any person who co-signs on the mortgage must have good enough credit to qualify for the loan themselves.