Bad Credit Home Loans Houston TX

From LoveToKnow Mortgage

Finding bad credit home loans Houston TX is not nearly as easy as it once was, but there are still lenders within the area willing to accept borrowers with less than perfect credit. Houston residents with bad credit should be prepared to encounter high interest rates and plenty of fees when seeking a mortgage.

Houston

Houston, Texas

Even though the cost of living in Houston is lower than many comparable cities within the United States, there are still plenty of residents within the city and living in the surrounding areas who struggle with credit issues. Since home prices are oftentimes lower in the Houston area than other large cities in Texas and around the country, residents may feel compelled to apply for a mortgage even if their credit isn't in the best shape.

For more information on homes available within the Houston area, check out the listings on Homes.com.

Lender Apprehension

Subprime mortgage loans were a booming business in Texas until the mortgage crisis hit and lenders started tightening their standards substantially. Instead of eagerly accepting applications for bad credit home loans Houston TX, lenders started insisting on higher credit scores and more documentation of salary history and other information.

Mortgage lenders willing to approve subprime mortgage applications still exist within the Houston area, but they are nowhere near as prevalent as they once were.

Houston FHA Offices

Borrowers can increase their chances of getting approved for a mortgage loan with bad credit by seeking out an FHA guarantee. Although the Federal Housing Administration does not fund mortgage loans, they will guarantee the loan making it more attractive to potential lenders.

There are several approved housing counselors with offices located within Houston. These counselors are trained to assist potential borrowers before applying for a mortgage. Find the counselor nearest you by searching the FHA approved counselors listing or by calling (800) 569-4287.

Find Bad Credit Home Loans Houston TX

Here is a list of lenders who offer mortgage loans to people with bad credit within the Houston area. While some of these lenders are specific to Texas, some of the other lenders accept applications from consumers nationwide.

Keep in mind that these lenders do not guarantee approval for all applications. Even subprime lenders have credit standards and minimum down payment requirements.

  • Texas Lending: This company advertises high mortgage approval ratings for applicants with credit scores of 620, or as low as 540 with an FHA guarantee in place. They also offer down payment assistance programs and special financing for applicants with no credit.
  • Southwest Funding: This lender offers prequalifications online and has a wide variety of financing options available including fixed rates, adjustable rates, and balloon payments.
  • Texas Capital Mortgage: This lender has a sliding scale of the required down payment for a mortgage loan approval with bad credit. For example, while a borrower with a credit score of 520 must put down at least 30%, a borrower with a credit score over 680 will only need to put 3% down. These down payment requirements are beyond the credit approvals.
  • Southwest Home Loans, LLC: This company claims to be experts in obtaining 100% financing for mortgage loans in the Houston area. They advertise hundreds of loan programs to assist people with bad credit in buying a home.

An alternative to going directly to a lender within the Houston area is to utilize the services of a broker service, which accepts you application on behalf of several lenders and then finds the best deal possible. An example of this kind of service is Home Loan Search.

Present Bad Credit versus Previous Bad Credit

Even though these lenders, along with others within the Houston area, market their loan products to applicants with bad credit it does not mean that it's easy to get a mortgage loan with a low credit score. Borrowers will have a much better chance of getting approved if the bad credit is in the past and steps have been taken to improve the financial situation.

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