Many would-be homeowners believe that in order to qualify for a mortgage, your credit score must be in the 600s or 700s. This is untrue, as numerous mortgage lenders offer home loans to borrowers with credit scores as low as 500. The following loan options may be available to you if your credit score is 550.
FHA Loans for Borrowers with a 550 Credit Score
An FHA loan is the most popular loan option for borrowers with a credit score of 550. Remember that in order to be eligible for a 3 5% down payment and a minimum credit score of 580 are required. Borrowers with credit scores between 500 and 579 may still be eligible for an FHA loan, but they must put 10% down instead. Some of the top FHA lenders for credit scores between 500 and 579 are listed below:
These lenders provide the chance to obtain an FHA loan with a credit score of 550 (or any score between 500 and 579)
If you need help finding a mortgage lender, we can put you in touch with a company that provides home loans to borrowers with credit scores as low as 550.
Non-Prime Loans for Borrowers with a 550 Credit Score
Non-prime loans, also referred to as non-qm loans, are available in addition to FHA loans. These are the loan products that alternative mortgage lenders offer to borrowers who have poor credit and other difficulties qualifying for conventional and FHA loans. These financial institutions offer mortgage loans to borrowers with credit scores as low as 500. You can learn more about some of these lenders below.
We can match you with a mortgage lender that works with borrowers who have credit scores as low as 500 if you’d like some help locating one that might be able to assist you.
Can someone with a credit score of 550 obtain a conventional loan?
No, a 620 credit score is needed for a conventional loan as a minimum.
Can I get a USDA loan if my credit score is only 550?
No, a 640 credit score is needed to automatically approve a USDA loan. Sometimes loans with credit scores below 640 are approved, but a manual approval is necessary.
Can I get a VA loan if my credit score is only 550?
Yes, you might be able to get a VA loan with a 550 credit score if you’re eligible for one.
Can I get a jumbo loan if my credit score is only 550?
Technically, jumbo loans don’t have a minimum credit score requirement. A borrower must have a credit score of at least 680 to qualify for most jumbo mortgage lenders. However, some non-prime jumbo lenders lower their minimum credit score to 580.
What if I have had a major credit event recently?
You might still be able to get a mortgage if you recently filed for bankruptcy, had your home foreclosed on, or sold it short. Even one day after such events, a number of non-prime lenders offer potential borrowers loan options.
Are there other credit requirements that I should know about?
Most mortgage lenders demand that your credit report contain 3 trade-lines. Auto loans, credit cards, personal loans, and other lines of credit that qualify can be used as examples. This rule may not apply to non-traditional sources of credit, such as phone bills, utility bills, gym memberships, etc.
How can I determine if I’m eligible for a mortgage?
Finding out if you are eligible for a mortgage is simple. We can assist you in finding a mortgage lender who works with borrowers who have a credit score of 550. They can help you determine whether you qualify for a mortgage. Please complete this form to have a mortgage lender get in touch with you.
Can you get a home loan with 550 credit score?
Any borrower with a credit score of 500 or higher is eligible for the FHA-backed loans. To put it another way, if your score is 550, you can apply for an FHA loan with just a 10% down payment on the cost of the home.
Can I get a FHA loan at 550 score?
FHA mortgages are not available to applicants with credit scores below 500 at the minimum decision level. Those who use the FHA 203(h), Mortgage Insurance for Disaster Victims, are eligible for 100% financing from the FHA with no down payment necessary if their credit scores are 500 or higher.
Is 500 a good credit score to buy a house?
Depending on the type of mortgage loan you’re applying for and your lender, the minimum credit score required to buy a house can range from 500 to 700. While it is possible to obtain a mortgage even with poor credit, the best terms are usually only available to those with excellent or good credit.
Can I get a mortgage with a credit score in the 500s?
An FHA loan can be applied for by anyone with a credit score of at least 500. But it makes more sense to apply for a conventional mortgage if you already have a credit score of 620 or higher. For conventional loans, you can put down as little as 3%, but the lowest amount for an FHA loan is 3. 5 percent.