Buying a home is the most important purchase you may make, and it is still the best investment for your future. Renting is just paying a mortgage for someone else.
Even if you have a low credit score, you can buy a home if you meet some of the lenders’ qualifications and the loan guidelines.
US Department of Agriculture (USDA) has loans with no down payment required. The USDA does not set a minimum credit score requirement, but most lenders require a score of at least 640, which is the minimum score needed to qualify for automatic approval using the USDA’s Guaranteed Underwriting System.
For an FHA loan, you have a 500-579 credit score you can qualify with 10% down payment. If your score is 580 or above, you can qualify with just 3.5% down. While you need 3.5% down for FHA, they do allow 100% of the down payment to be a gift. You can also have a non-occupant co-signer on the loan with a better credit score.
The VA doesn’t set a minimum credit score requirement for the VA loan but also does not make the loan. Lenders who make the loans will typically have a credit score minimum. That score varies by lender, but a 620 FICO score is a common credit score requirement for a VA loan. You will also need your DD-214 to find out your eligibility requirement.
Credit Unions and local banks may have other credit score requirements.
The first thing to do if you want to buy a home is to contact a lender and find out what you will qualify for. Then contact a REALTOR© to look at homes. They can also help you find a lender to speak with.
Visit www.azalearealestate.us to preview homes or contact Aleta Boudreaux at 251-656-4576 for more information on selling or purchasing a home and to tour homes in South Mobile County.