Home Buying and Credit Scores

Lots of people desire to buy Suffolk VA Homes , but don’t think they can qualify for a mortgage loan because they have low credit , no credit, or a bad credit history . To buy real estate , buyers must have fairly good credit, but the FICO score isn’t the only factor that makes one eligible for mortgage loan . If you have a credit score of atleast 640, you are a likely candidate for a home loan. If a FICO score is higher than 720 you will most liikely qualify for the best rates as long as you meet other loan qualifications . FHA loans home loans typically have less strict credit requirements .

Debt to Income

The DTI or debt to income level is a very important factor lenders regard when approving mortgages . They don’t just want to see bills paid , they also want to see that you have the income to support the mortgage and all your other debt . The general guideline many banks have is a  35% debt to income ratio , and of that debt, they will allow up to 28% for the home loan . By not having consumer debt: credit cards , car payments , and education debt you can buy a nicer home . In reality, many FHA loans and other Fannie Mae and Freddie Mac programs will permit debt to income ratios at close to 50% . Talking to a mortgage lender can give you specific details about the debt to income requirements for specific loan products .

If your debt to income ratio is too high , you will not qualify for a home loan even if you have an excellent credit rating .

People with poor credit scores, but good income to debt ratios , and a decent down payment can probably qualify for a mortgage loan through hard money or private lenders . The rates will be substantially more expensive than traditional loans .

Home buying options for buyers with poor credit scores

If you have a low credit score , try to fix it as soon as possible . Credit is fixed by having debt and paying it on time, and in full all the time .   It is also possible to buy real estate in Suffolk VA with bad credit by using Rent to Own, Lease Options, or Seller Financing.