Can I get approved for a home loan with bad credit?

You might be able to get approved for a home loan with bad credit. While credit scores in the mid 600s typically make it more difficult to qualify for a mortgage, there are lenders who will approve you. However, be aware that if you do find a lender willing to give you money, you will have to pay a much higher interest rate than the market average.

To increase your chances of getting approved for a mortgage and to get lower rates, you should first work on improving your credit score.

Hi!  It is possible to get a home loan for a primary residence when your credit is not good. The trade off will be that you will probably have to pay a higher interest rate on that mortgage than if you had better credit.  You can think of it this way – a lender takes a risk in lending money in that the borrower may not pay the loan back. A lower credit score shows past behavior of having trouble paying back money that has been loaned.  To the lender that means a borrower is more of a risk , so the lender charges more for the privilege of borrowing that money to cover the risk. 

If the credit score is in so much trouble that mortgage lenders won’t lend even at higher rates, there are other potential solutions. Some tips:

-          If your income is such that you qualify, you might be able to get an HUD-FHA loan from the government which allows borrowers to have lower credit scores than conventional lenders.  Here is the website: https://portal.hud.gov/hudportal/HUD?src=/buying/loans

-          If you are buying a house with a spouse or another person, their better credit score will help in getting a mortgage

-          You can work to improve your credit score so that you will qualify for a home mortgage in the future.  This Wallet Hub website has suggestions: /edu/cs/how-to-fix-your-credit/21169

Hopefully this will help!  Thank you for writing.

This one goes down as a definite "maybe".  I have seen people with a credit score of 625-650 get approved for a mortgage if there is a reasonable explanation for negative items on your credit report.  Above 650, the odds increase pretty substantially.  And, with FHA loans & the HomePath program, those with less than ideal credit can get approvals.  The underwriters will scrutinize recent delinquent payments more than things that happened 5 years ago.  If you check out WalletHub, CreditKarma & CreditSesame - you can get  a great handle on your credit score and look for ways to improve it rather quickly.  While it's possible to get a mortgage at 630, but if you get to 650+ your odds will go up.  

No that is a little under the minimum but you may qualify for a grant to pay the down payment if your income is the reason for your low score and not just bad spending habits