One third of Americans have a credit score of less than 620.
Zillow.com studied 25,000 online home mortgage applications and found that prospective home buyers with credit scores lower than 620 could not get Columbus loans approved, even when they were able to make a down payment of 25% of the purchase price.
Only 47% of Americans have a credit score higher than 720 – which is considered good credit and would qualify you for the lowest interest rates on Columbus loans.
Another interesting finding by this study indicates that for every 20 points drop in your credit score your interest rate goes up by 0.12 %. Over the life of a 30 year mortgage this could cost you tens of thousands of dollars.
So what options do you have to get Columbus loans, if you credit score is below 620?
- Try to get an FHA Loan: they still don’t rely exclusively on credit scores and may use alternative “credit” to approve your loan. FHA loans require a much lower down payment and may be your only option, if your credit score is below 620.
- Get Seller Financing: this may be the only option for many home buyers that can’t get loans through a bank. Many sellers are very motivated, as they can’t sell their homes as quickly as the want and will consider seller financing. You may get away with a relatively low down payment of 5% or 10% of the purchase price, but you have to be ready to pay full price for the house.
If you are ready to buy a house and can’t get regular bank financing, give us a call. We have a limited number of seller financed properties available and we work with one of the best FHA lenders in Central Ohio.
You can reach Columbus real estate agent Susanne Novak at (614) 975-9650.
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Low Credit Scores? Need to by a home? Rejected by Bank?
Don’t worry, we are there for you. Prosperous Holdings, LLC (614-547-3189) prides itself in being a real estate investment company that provides creative win-win real estate solutions for home sellers, home buyers, and our investors.
We buy and sell all types of real estate. We buy single family homes, whether they’re pretty houses, ugly houses, or just need some TLC.
We work with buyers who want to secure a home and live in it now. We want to help people who may not have perfect credit now, but want to explore all options in how, when, and what type of financing they will get to buy the home in the future. We work with all types of buyers and situations. Some need time to alleviate a shortage of down payment money, some need time to solve credit issues. Some just want to try out the house, schools or neighborhood. After our Tenant-Buyers move in, we work with lenders to help them repair their credit, so they can qualify for a new loan and then buy the property.
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