Can You Get a USDA Home Loan With a Credit Score Below 640

If you want to get approved for a home loan, you generally need a credit score of at least 640. The good news is that you can still get a mortgage with poor credit assuming that you have sufficient income or are flexible when it comes to who makes your loan. Let’s take a closer look at some other variables that could increase the odds of your loan application being approved.

What’s Your Debt-to-Income Ratio?

Let’s say that you filed for bankruptcy two years ago because you relied too heavily on credit cards to make purchases. While the bankruptcy itself will be a red flag to lenders, the fact that it wiped away a large portion of your debt could be encouraging.

If you have a debt-to-income ratio of less than 25 to 28 percent before adding in the home loan, it may signal that you can handle the new loan. However, this could also depend on how much you make per year, what type of job you hold and your credit performance over the last 12 months. (Read more about lease to own programs here.)

Look for a Private Lender

A private lender is a person or group of people who make home loans using their own money. This could be ideal for those who can’t get a traditional loan or who don’t want to work with a bank for any other reason. It should be noted that interest rates could be higher, and private lenders may not allow loans to be paid off early.

A Loan Officer Can Explain Your Options

A loan in officer Las Vegas may be able to explain the options available to you if your credit isn’t the greatest. He or she could talk more about down payment assistance programs or rent-to-own options in your area to make buying a home easier.