How do you find low credit score mortgage lenders in Chicago, IL? Low-interest rates and scores do not go hand in hand, but this is probably the best situation you are earnestly looking for.
In this article, we mention the best ways to find a mortgage lender who is willing to work with your low credit scores.
Finding a Lender for Your Type of Mortgage
Did you know every lender does not provide government-backed mortgages? Yes, you may find lenders offering only conventional loans, but not FHA or VA loans. When you might be looking for an FHA loan, it is important to do research. Check whether the lender is FHA-qualified and willing to allow borrowers with low credit scores.
Loans partially insured by the Federal Housing Administration are for buyers with low FICO scores. On the other hand, VA loans are the best choice for active military members or veterans so that they can put down zero percent of the loan value. There is another mortgage to consider – USDA loans for low- or average-income buyers in rural locations. These mortgages are also available with zero money down.
Working on Your Credit Score
You must meet the credit criteria in order to qualify for a home. Income criteria are not what every lender asks for; however, you need to prove two years of employment. A low credit score is an automatic indicator of higher interest. But higher credit scores mean you can access more power during the negotiation period. With credit scores plunging below 580, you might have trouble qualifying.
Even though you are looking around for low credit score mortgage lenders in Chicago, IL, improving your credit score is expected. Pay off debts and keep the DTI ratio as low as possible. Clearing debt for credit cards and existing loans might also help in the down payment.
Comparing Lenders’ Rates
Start the research by finding the best rates online. Mortgage lenders pull your data to provide you with an accurate rate. When you have multiple quotes with you, choose the one that works best for you. Remember, finding the lowest rate should not be your priority.
If you work with a good lender, you will have a much easier time ahead. The rate is always important but you should be aware of hidden charges. Of course, being careful about choosing the right loan might lead you to save money.
