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Buying University Hills Real Estate With Less-Than-Perfect Credit

September 5. 2018

Buying a home. For many, it’s the equivalent of the American dream, but it can be out of reach for some people, particularly those who have credit scores that are less than ideal. But the good news is that buying University Hills real estate is still possible. Although the better your credit, the better your loan terms (such as a more favorable interest rate), there are still steps you can take to become a homeowner—and with today’s appreciation, it might be well worth it.
Find Out What Your Credit Score Is
There are a number of ways to find out what your credit score is. Referred to as a FICO score, this number reflects the amount of debt you have, the amount of credit that is available to you, whether you have made payments on time, and so forth. Knowing your score will help you figure out whether or not you will qualify for the best loan terms or not.
You should also check your credit report to find out whether or not there are errors on it that are lowering your credit score. Get those corrected as soon as possible.
Here are some tips from the experts at My FICO on bumping up that credit score if there is room for improvement: How to Repair My Credit and Improve My FICO® Scores.
Mortgages Specifically Designed for Those With Poor Credit
The Federal Housing Administration (FHA) offers loans you can get with a lower down payment and a lower FICO score. FHA loans are one of the most popular types of loans for first-time homebuyers as well. But there are some other costs involved.
Since you can get an FHA loan without the standard 20 percent down payment, you will have to carry mortgage insurance on the loan to protect the lender in case you default. These are usually paid in the form of monthly premiums that are tacked on to your mortgage, tax, and insurance payment each month.
You’ll have to carry this insurance until you have equity in the home, at which time you can refinance your mortgage to drop this extra payment.
In addition to FHA loans, there are other government programs available for first-time homebuyers and those with less-than-perfect credit.
Determine How Much House You Can Afford
Although some of this is simply a matter of budget—and what you can reasonably afford to pay each month for housing—there are other limits you should know about. The maximum loan values for FHA loans vary across the country, so you’ll need to speak with a lender.
If you’re thinking about purchasing University Hills real estate, Elevation Realty can help. If you are concerned that your credit score will hinder the process, set up a meeting with us and we can go over the numbers. Homeownership does not have to be out of reach. Contact the Elevation Realty team when you are ready to purchase your dream home or give us a call at 303-579-3566 to begin your search.