Buying a house has become synonymous with “the American dream.”
However, far too many prospective buyers have found that owning a home has many prerequisites. In addition to having enough money for a downpayment, one hurdle has proven problematic for many to overcome: learning how to buy a house with bad credit Arizona
. Fortunately, a low credit score won’t prevent a borrower from buying a home. While options may be more limited, buying a house with bad credit is possible if you know where to look and the appropriate steps.
What Do Mortgage Lenders Consider A Bad Credit Score?
Contrary to what many believe, today’s mortgage lenders do not establish a good or bad credit score benchmark. Moreover, most mortgage lenders neglect to require a minimum credit score in return for their services. Instead, the quality of a credit score is entirely dependent on the cumulative data provided by three main credit bureaus: TransUnion, Equifax, and Experian.
Borrowers’ credit reports for a Bad Credit Mortgage in Arizona
largely depend on the information generated by these three credit bureaus. However, instead of relying on three independent reporting agencies for their knowledge, mortgage lenders will generally look to the cumulative FICO scores to determine how creditworthy a borrower is. A FICO Score
is a three-digit number based on the information in the previously mentioned credit reports and indicates how likely a borrower is to repay their loan.
There are five primary credit score categories prospective homebuyers may fall under (according to FICO):
- Poor: Less than 580
- Fair: 580 – 669
- Good: 670 – 739
- Very Good: 740 – 799
- Exceptional: 800 or more
According to the latest FICO scores, anything less than 670 is bad—or subprime. It should be noted, however, that mortgage lenders will consider more than a borrower’s FICO Score. In particular, lenders will also consider the following:
- The borrower’s down payment
- The amount of debt the borrower has
- How much income does the borrower make
- Whether or not the borrower has any debts in collections
Anyone interested in learning how to buy a house with Mortgage Loans for bad credit
must first look into what today’s lenders view as acceptable; only then will borrowers be able to take the next step.
Equal Housing Opportunity. This is not a Good Faith Estimate and this is not a Guarantee to lend and should not be considered as such. Costs, rates, estimates and terms can only be determined after completion of a full application. Actual payments will vary based on your individual situation and current rates. APR for loans vary from 7.99 – 29.5% and is based on Credit Score, Down Payment, LTV, Income. Mortgage rates could change daily. To get more accurate and personalized results, please call 623 582 4444 to talk to one of our licensed mortgage experts. Terms and conditions of all loan programs are subject to change without notice. Level 4 Funding LLC, 22601 N 19th Ave Suite 112, Phoenix AZ 85027, 623-582-4444 NMLS 1018071 AZMB 0923961 This e-mail is for the exclusive use of the intended recipients, and may contain privileged and confidential information. If you are not an intended recipient, please notify the sender, delete the e-mail from your computer and do not copy or disclose it to anyone else. Your receipt of this message is not intended to waive any applicable privilege. Neither this e-mail nor any attachment’s establish a client relationship, constitute an electronic signature or provide consent to contract electronically, unless expressly so stated by Dennis Dahlberg RI/CEO, Level 4 Funding LLC, in the body of this e-mail or an attachment. To the extent this message includes any tax or legal advice this message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice.
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.