First-time homebuyers face issues when getting their first home and one of them is not being approved for a home loan. Banks and some lenders deny home loans to homebuyers because of their low income, no down payment and of course, bad credit scores. If you do not have a good credit score, you can still apply for a home loan in Texas. But for that, you have to meet some loan requirements although various loan programs are present for individuals with bad credit scores who love to purchase their dream home in Austin. In this post, we will show you all the home loan options so you can find the one suitable for your current needs.
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Different Home Loan Options for First-Time Home Buyers
If you are a first-time homebuyer and a lender turned you down due to your credit ratings, you can still purchase a property. It is undeniable that conventional criteria need 620 or higher credit scores, and no lender is allowed to approve a conventional loan with a credit score below that. You do, however, have further choices for home loans Austin TX.
FHA Loan with Bad Credit
Because the requirements are the most lenient and you can utilize your salary to buy a more expensive home, an FHA loan is the go-to financing option for first-time home purchasers. When it pertains to credit score standards, FHA loans are rather lenient. According to the standards, first-time homebuyers are allowed to have an investment of just 3.5% and have credit scores starting as low as 580. Without a 10% down payment, you might still be eligible for an FHA loan with the help of FHA loan brokers Austin TX even if your score is between 500 and 579.
VA Loan For Bad Credit Score Holders
The VA loans are suitable for military personnel, service members, and veterans because they are entitled to get these loans. In other words, this loan option is designed for them and no down payment is required. The R&J mortgage brokers can help ex-servicemen acquire these loans since no specific credit score is needed from the borrower. But almost all lenders have established their standards for credit ratings, hence why they frequently inform veterans that their credit scores are insufficient and they are thus ineligible. While they are hard to come by, lenders who would approve VA home loans Austin TX with low credit scores do exist.
Bankrupt but You Can Avail Home Loans in Texas
Even though you could have the scores of credit required for a mortgage for a first-time homebuyer, you might not be able to proceed once you suffer from a credit incident. A short sale, foreclosure, or bankruptcy is an example of a credit event. Each mortgage program will handle these occurrences differently. You can proceed with home loans Austin, TX from the FHA if you are in the final year of a Chapter 13 maintenance plan, but you will need to wait two years after bankruptcy with Chapter 7 discharges. However, the lender may see the foreclosure as very problematic since the waiting period will be much longer.
R&J Mortgage Brokers 11615 Angus Rd 1st Fl Ste 224, Austin, TX 78759, United States +17373590774 https://rjcmortgage.com/austin-tx-branch/