The Top Home Loans Lenders for Bad Credit
You may want to learn more about home loans lenders for bad credit if you have a less-than-perfect credit score. A credit score is used by financial institutions to measure your financial health or credit worthiness.
Your credit score will determine how expensive, or how difficult, it will be for you to access loans. The higher your score, the lower the interest rates and the easier it is to access credit services, and vice versa. However, having a bad credit score is still better than having no credit score at all. While a bad credit score may mean higher interest rates and limited or low loan limits, no credit makes you ‘credit invisible’ which can keep you from accessing even the most basic milestone payments.
Credit scores are measured within a range of 300 to 850 points. In most cases, a score in the range of 300 to 649 is considered ‘bad.’ However, all is not lost if you are in need of a home loan yet your credit score is in the ‘bad’ category since some lenders still provide mortgage loans to customers with bad credit scores. Below is a list of the top home loans lenders for bad credit.
1. Lending Tree
While Lending Tree is more of a broker than a loan provider, it has facilitated about $250 billion in loans to fulfill over 55 million requests made through the platform to date. The platform allows customers to make home applications and receive offers from interested lenders in less than ten minutes. Customers can apply for various loan programs including Veterans Affairs (VA) loans, Federal Housing Administration (FHA) loans, Fannie Mae HomeReady loans, and USDA loans.
According to Lending Tree, FHA-backed loans are more flexible and affordable than traditional bank loans. FHA-backed loans are accessible to people with minimum credit score of 500 while VA loans, USDA loans, Fannie Mae HomeReady loans are all accessible to people with a minimum credit score of 620.
2. Quicken Loans
Quicken Loans is one of the leading mortgage lending companies in the United States. Mortgage loans applications typically take about six minutes on its platform with down payments from as low as 3.5%. The company avails FHA loans to customers with credit scores as low as 580. Customers with a minimum of 620 qualify for other types of offered mortgage loans as long as they have a good debt-to-income (DTI) ratio.
3. Wells Fargo
Wells Fargo is one of the largest banks in the United States and provides home loans to customers with credit scores lower than 620. Home loans applications on Wells Fargo’s platform takes about six minutes and the bank provides FHA loans, VA loans, USDA loans, and Union Plus home loans for home buying, mortgage refinancing, and home improvements. FHA-backed loans require down payments starting from 3.5% while down payments for the other loan categories depend on the factors such as the state (location) and value of the property.
4. Bank of America
Bank of America is a multinational bank headquartered in North Carolina. Application typically takes nine minutes and the bank provides FHA-backed and VA loans for applicants with bad credit scores at zero down payments for all qualified borrowers.
However, interest rates may be higher than for customers with higher credit scores and vary according to location and value of the property. So make sure you check the mortgage rates accordingly.
5. Citi Mortgage
Citi Mortgage is another solution for home loans applicants with poor credit scores. The bank avails FHA-backed loans and HomeRun mortgages to customers with bad credit scores. FHA loans are available to customers with bad credit scores with down payments below 20% while HomeRun mortgages offer flexible credit guidelines and require 3% down payments. Monthly payments and interest rates are subject to property location, value, and repayment period.
So, if you are looking for home loans lenders for bad credit scores, we’ve also got you covered.