Options for Getting a Mortgage with Bad Credit

If your credit is bad, it is only natural to worry that you won’t be able to get a mortgage. However, even with bad credit, you have options. Generally, you might have to shop around a bit more to find the right mortgage lender and might have to pay more toward your home loan. Yet, at the end of the day, if you find the right lender, you can obtain a mortgage that is appropriate for you and fits your financial needs while meeting your budget as well.

Best Overall Mortgage Lenders for Borrowers with Bad Credit

Certain lenders are available to help individuals with bad credit to find the right mortgage. The following are considered the best overall when you have a low credit score and are looking for a mortgage to buy a home:

  • Carrington Mortgage Services: Carrington Mortgage Services generally caters to new home buyers and borrowers whose credit isn’t the best. It offers loans with fixed rates for purchase and refinance mortgages, including conventional, FHA, VA and USDA loans and has a minimum credit score requirement of 550. The company is also licensed in all states in the United States except for Alaska, Massachusetts, North Dakota and Vermont. The mortgage process is fairly quick and simple and can be done online, over the phone or in person when you visit a Carrington branch in specific states. Generally, online is the best way to apply.
  • New American Funding: New American Funding offers mortgages to individuals with low income and bad credit. It seeks borrowers who don’t fit the traditional credit history mold, with many clients being minorities. The company has branches throughout the country except in Hawaii and New York and offers a number of down payment assistance and grant programs. Its minimum FICO credit score requirement for FHA and VA mortgage loans is 580. It offers loans that don’t affect your credit and uses manual underwriting to evaluate a potential borrower’s creditworthiness. Application is done online at the company’s website.

 

Best Online Mortgage Lenders for Bad Credit

If you are strictly looking to apply for a mortgage loan online and have bad credit, these are the companies you will want to consider:

  • Rocket Mortgage by Quicken Loans: Rocket Mortgage by Quicken Loans offers fixed rates of eight to 30 years to borrowers whose credit score is at least 620. For individuals looking to secure FHA loans, the minimum credit score requirement is 580. Generally, the company’s mortgages are more likely to be sought by younger people looking to buy a home rather than refinance their existing home.
  • G. Wentworth Home Lending: J.G. Wentworth offers a variety of mortgage products, including government-insured loans from the FHA, USDA and VA. The minimum credit score required to qualify for an FHA or VA mortgage loan is 580. There is a lender fee of $299 for most loans. The company’s mortgages with fixed rates have terms of 10, 15, 20, 25 and 30 years, giving borrowers plenty of options.

 

Best Refinance Mortgage Lenders for Bad Credit

If you have bad credit and are looking to refinance your home, the following are the best options to secure your mortgage:

  • Quicken Loans: Quicken Loans is the largest FHA lender in the United States and has a minimum requirement credit score of 580 for its loans.
  • ConneXus Credit Union: ConneXus Credit Union operates in 48 states and offers refinance mortgage loans to individuals with bad credit whose score is at least 600. Of course, to qualify for the mortgage, you must be a member.

These are some of the best options available if you have bad credit and want to acquire a mortgage. It’s wise to explore what each company offers so you can ultimately choose the one that’s best for your needs and financial situation.

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