If you have bad credit you may find it difficult to buy a home. By
being proactive and taking certain steps to repair your credit, you can find loan products like hard money loans Texas  borrowers with bad credit rely on to help make
your dreams come true.

Bad credit can make getting a car loan, credit card, and even a job
difficult. Although you may feel isolated, you are far from alone. According to
recent statistics released by FICO Inc., the average credit score is about 670
which is considered a “fair” score. In addition, nearly one quarter of all
credit using Americans have poor credit. So, although you may feel alone, there
are nearly 42 million Americans who are in the same boat as you. Bad credit can
also become a vicious cycle. You need to repair your credit by making on time
payments, not one will give you the opportunity to make on time payments so you
bad credit stays bad. You may begin to feel that the situation is hopeless.

One way to help rebuild your credit is by purchasing a home and making
on time mortgage payments. If you have bad there are a variety of ways and
programs to help borrowers with bad credit get home loans, including hard money loans Texas bad credit borrowers depend on. Since the housing crisis of 2008 there has been
a rumor that only borrowers with perfect credit can be approved for home loans.
However, with banks and lenders relaxing their credit requirements, more home
loans are being approved at lower borrower credit scores. Some programs will
even approve borrowers with a score as low as 500 as long as the borrower has
some cash for a down payment.

If you have bad credit and are thinking about applying for hard money loans Texas, there are a few
steps you can take to help make sure that you will qualify. First, make all of
your rent payments on time. 12 months of on time rent payments can help when a
lender is trying to decide if you are worth the risk in terms of a mortgage
investment. In addition, start saving cash. Money talks, usually louder than
credit alone. Having 6 months to a year of living expenses in the bank
(including mortgage payments) will make it more likely that a lender will
finance your mortgage. In addition, save up for a down payment. 

The type of loan that you will be able to qualify for depends on how
low your credit score is. If you have a score of 650 or higher, you have a
possibility to qualify for a traditional loan. A traditional loan is a fixed 15
to 30 year loan with payments that will remain roughly the same for the entire
loan term. Payments may fluctuate slightly based on property tax amounts but
they principal and interest will remain the same. In order to qualify for a
traditional loan you will need to put between 5 and 20 percent of the loan
amount down.

If your credit score is less than 650, you can still find home loans that you can qualify
for. While hard money loans Texas are a great option for many borrowers, there are other loan products that you can talk to your Texas mortgage broker about.

One of the main types of loans that can help sub-prime borrowers is an FHA
loan. An FHA loan is a loan that is secured by the federal government. You will
pay a fixed rate for principal and interest for a 15 to 30 year loan term. You
will also pay mortgage insurance in the amount of 80 to 200 dollars each month,
depending on the amount of your loan. You can qualify for an FHA loan with a
credit score as low as 500 as long as you have between 3.5 and 10 percent of
the loan value to put down.

If your credit is less than 500 or you don’t have the cash
for a down payment or can’t be approved for other reasons, you might want to
look into some less common mortgage programs like rent to own, seller
financing, or having a cosigner. Just keep in mind that all of these programs
do have some inherent risk and you should make sure you are well informed about
the loan type going into it.

A broker can help you start your home ownership journey. Call one today and stop
letting bad credit define your home ownership goals.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
dennis@level4funding.com
www.Level4Funding.com

111 Congress Ave |Austin | Texas | 78701