People wish to one day buy a home in the beautiful city of Houston, but buying a house requires a significant amount of money. The wealthy people can easily afford to buy a home of their choice while people with financial troubles have to rely on assistance from mortgage loans. The homebuyer assistance programs have different home loans which aspiring homebuyers can obtain according to their needs and financial situation. The homebuyers have the option to either choose conventional loans from banks or get government backed loans from approved mortgage lenders. The homebuyers failing to get conventional loans due to bad Credit usually seek financial support from 500 credit score Mortgage Lenders Houston. Credit scores are a decisive factor in all types of mortgage loans. The lenders use credit scores to analyze the creditworthiness and ability of the homebuyer to repay the Loan on time or not. The credit scores are classified from 300 to 850 by FICO (Fair Isaac Corporation). Any score at 500 or below is considered bad credit and shows the person has missed paying the debt for several months. The banks do not give conventional loans to homebuyers with bad credit as there is a risk that he will likely default on the loan amount. The 500 credit score mortgage lenders Houston mostly provide government loans such as Federal Housing Administration (FHA) loans, Veteran Affairs (VA) loans which are known for having the most lenient loan requirements. The FHA loans are best home loans for first time homebuyers who have bad credit and want a loan with the low down payment. The first time homebuyers can make a 10% down payment to acquire the FHA loans. The homebuyers with high debt to income ratios, up to 50% can also obtain the FHA loans. The VA loans are offered to veterans, their families, and currently employed military men and women. The VA department does not even have any credit score requirement. The veterans with bad credit can obtain VA loans and get numerous advantages such as no down payment and no mortgage insurance. The FHA and VA loans are insured by the government, which reduces the risk of the mortgage lenders and allows them to help the potential homebuyers. However 500 credit score mortgage lenders Houston do require homebuyers to give some assurance in the form of compensating factors which are • Convincing lenders on the reasons that caused the bad credit score • Have regular employment that gives a substantial monthly income • Maintain a low debt to income ratio • Have no outstanding debt to pay; and • No late debt payments for the past 12 months.
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