So you’re tired of writing a check each month to your landlord, and essentially, paying their mortgage for them. You’ve probably heard you need to have at least “fair” credit to purchase a home, and while it’s true that lenders would prefer you have a good credit score to prove you’re a responsible borrower, there are ways to get qualified for a home loan with poor credit. In fact, there are loans out there specifically catered to those with bad credit! So don’t be discouraged—you still have some options!

1. Put More Money Down: Some lenders might be more compelled to lend you money if you come up with a larger downpayment. This will show them that you are willing to take on the risk, and are less likely to walk away from the mortgage if you put more of your own money down.

2. Be Willing To Pay a Higher Interest Rate: Lenders will charge clients with poor credit a higher interest rate to protect themselves since a low credit score typically means you’ve been late or delinquent with payments. A higher interest rate means your monthly payment will be higher, but in the event you repair your credit score, you can refinance your loan for better terms!

3. FHA Loan: Conventional loans don’t have a set minimum requirement, but 620 usually is where lenders draw the line unless you have a larger down payment or higher income. However, you may be able to get approved for a loan backed by the Federal Housing Administration if you are a first-time homebuyer or haven’t purchased a home in the last 3 years. The minimum score needed for this type of loan is 580, but if you can come up with a 10% down payment, you could get approved with a score between 500-579. There are other restrictions this loan has, one of which being the purchase has to be your primary residence.

Check with different lenders to see what they can offer you, and remember, credit isn’t all that they look at—they will also check things like your income to debt ratio, and collections accounts. Above all else, keep working on your credit score, and good luck!

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