Lots of people want to buy Santa Rosa CA Real Estate , but don’t think they can get a mortgage loan because they have poor credit history , non existent credit, or bad credit . To obtain mortgage financing , buyers need to have fairly good credit, but the FICO score isn’t the only variable that determines your credit worthiness to get a mortgage loan . If your FICO score of atleast 640, you are a likely candidate for a mortgage loan. If your credit score is above than 720 you can probably qualify for the best interest rates assuming you match the other loan qualifications . Loans backed by the FHA typically have less stringent credit standards .

DTI Ratio

The debt to income level is also an important item lenders regard when underwriting mortgages . Banks not only want to see bills paid , they want to see that you have the income to support the mortgage loan . The general rule of thumb is that lenders will allow a 35% debt to income ratio , and of that debt, 28% of it can be for the mortgage . If you don’t have much consumer debt: credit card bills , auto loans , student loans, etc. you can buy a nicer home . Some FHA loans and other Fannie Mae and Freddie Mac programs will permit higher debt to income ratios . For exact criteria, you will have to talk with a mortgage lender about your particular home situation .

If you have too much debt , you will not be able to buy a house even if you have an excellent credit rating .

People with poor credit scores, but income , and a significant down payment can probably qualify for a loan through hard money or private lenders . These rates nearly double the monthly mortgage payment .

Options for buyers with poor credit scores

If you have bad credit , you can fix it over time . Credit is repaired by paying your bills consistently.   Other options to purchase real estate with bad credit include: Rent to Own, Lease with an Option to Buy , and Seller Financing.