How to Get a Home Loan with Less Than Perfect Credit?

The last four years of a challenged economy have resulted in many Americans facing financial difficulties.  We now find ourselves in an environment where investments (i.e. real estate, stocks, etc.) have lost value, unemployment has doubled, and overall spending has decreased dramatically.  Please continue reading below…

The unexpected hardships, such as losing a job, have left people in higher debt and lowered FICO scores.  While having a low FICO score may feel like the end of the world, there is a light at the end of the tunnel.  The good news is that over time, your credit can improve, AND there are still home loan options for individuals with less than perfect credit.  Even if your credit has had some challenges (i.e. late payments or large amounts of credit card debt), it might still be possible to get a loan with a little hard work (i.e. writing a letter of explanation or make some phone calls to the creditors to clear things up).

A lot of people think they have to wait 2, 4, 5 years or even longer after having credit issues, foreclosures, bankruptcies etc., but that isn’t always necessarily correct.  Without knowing the rules, it’s difficult to be confident about knowing exactly what you can or can’t do.

There are a lot of ways that someone can attain a home loan even if they have credit issues.  With conventional loans, you might have to put a larger down-payment, but FHA and VA loans are also available.  FHA loans are a viable option for individuals with FICO scores in the 500’s and 600’s.  Some of the features for FHA home loans include :

  • Max loan limit is $697,000 – which is nearly twice the median home price in San Diego county.
  • If your score is above 580 – standard FHA rules apply.
  • 3.5% down payment requirement.

What if my score is 560?  The good news is that you’re still eligible for an FHA loan, however you will have a set of restrictions to deal with.  In this case, a minimum down payment of 10% (still less than the 20% convention down payment) will be needed, along with a blood-related cosigner (additional restrictions may apply).

Falling into debt may not be avoidable, despite how well you prepared – but there is a way to take back control and purchase your dream home.  We are in an incredible buyer’s market and rates are at historic lows. Even with bad credit, there are huge opportunities for people who want to own a home.  In fact, I recently had a military veteran come in for a consultation.  After following some advice, he was able to buy a $430,000 house with zero down.  He had a bankruptcy and a foreclosure 2.5 years prior to our visit, yet we were able to get him a $430,000 home with nothing down.

Carmel Valley San Diego Community | Brians Shaw | Samuel Scott Financial Group

A San Diego native, Brian Shaw began his career in mortgage lending in 1999 after graduation from the UC, San Diego with a degree in Economics. With his background and experience, Brian can provide his clients with financing options that maximize the use of their money, while taking into consideration both their short-term and long-term financial goals. Brian’s professionalism, honesty and attention to detail along with his knowledge of finance have earned him high marks among his clientele.

Samuel Scott Financial Group is a boutique mortgage company recognized for superior customer satisfaction and the way they tailor the residential loan process to every individual client.  Todd “Samuel” Pianin and Brian “Scott” Reynolds founded the company on the principles of long lasting relationships, and a sincere honest approach to every single individual we serve.  Consistent and reliable, Samuel Scott Financial Group has been selected as The

Carmel Valley San Diego Community | Samuel Scott Financial GroupBest Mortgage Company in San Diego for the 5th straight year by readers of local publications.

President:  Todd Pianin

Vice President of Sales:  Russ Schreier

Mortgage Advisors:  Christian Alvarez,  Dean Brown, Mark Buchanan, Mitch Palmer, Brian Reynolds, Debra Roberts, Mark Robertson, Alex Scoma, Brian Shaw, Keith Sims, David Talbott.

Carmel Valley San Diego Community | Equal housing Lender | Samuel Scott Financial Group


Samuel Scott Financial Group is licensed by the CA Dept. of Real Estate license #01458652 and NMLS identifier 235584. ©2011 Samuel Scott Financial Group. All rights reserved.


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