Looking for home loans suitable for a borrower with low credit? Check out the top home loans for low credit scores in Aurora below.
The credit score is one of the prime factors of loan rejection for many in the US. So, does that mean that you cannot apply for a mortgage and dream of owning a house if you have a poor credit score? Of course not! There are home loans that you can apply for with a credit score as low as 500. You might not get approval from the banks and other traditional financial institutions, but you can access government loan programs through an authorized mortgage provider. Here are the top home loans for low credit scores in Aurora.
These are loans designed and authorized by the Federal Housing Administration for people with financial difficulties. The initiative was started in an attempt to encourage Americans to buy houses. FHA loans have the lowest credit score eligibility of 580-500 for loan approval. If you have a credit score of 500 your down payment would be 10% and if it is 580 then the down payment would be 3.5%. The terms and the interest rates vary from one mortgage provider to another. However, the borrower is required to pay a mortgage insurance premium annually.
USDA loans are backed by the U.S. Department of Agriculture. The loan initiative was started to increase the rate of homeownership in rural areas. USDA loans have the benefit of zero down payments, along with low-interest rates. You would need a 640 FICO to qualify for the loan. However, it can vary from one lender to another. To qualify for the loan you would have to show that you are buying property in a rural area.
Conventional loans have a minimum credit score of 620, which again is negotiable. These loans might charge a higher interest rate compared to other mortgages. The down payment amount also varies. The lesser the credit score, the bigger the down payment percentage.
On a concluding note, conduct sufficient research on the lender or mortgage provider, before getting down to loan business. If a reliable professional can streamline the process of getting home loans for low credit scores in Aurora, then an inexperienced mortgage provider who is never available for you can add to your financial burden by getting you the wring loan product. Be wise to choose right and fulfill your dream of homeownership.
AUTHOR BIO: Joan Gallardo is a Senior Loan Officer with 18+ years of experience writing about the top home loans for low credit scores in Aurora.