While you are cleaning up your credit score, try to save every cent possible to put toward a down payment. Down payments that are over 20% can help offset a poor credit rating.
We all know that getting approved for a home loan is a bit more difficult due to the strict lending standards imposed by banks after the real estate market crash. As a result, itâ€™s crucial to understand what banks look at when approving a home loan. This article can help you see what they look for in a credit score.
I can't say no, but I can say none that I'm aware of. Under the best case scenario most lenders will only consider a loan if your score is 580 or higher. Even during the days of very easy financing 5 years ago, 560 was the lowest number most of the secondary lenders would consider.
Your best bet is to go to work on your credit. Start with a realistic budget and stick to it. You need to set aside money for unexpected expenses such as car breakdowns and medical expenses.
You can go over your credit report and dispute items which are reporting inaccurately. Paying down credit card balances to around 1/3 of their limit can help raise your score. There are lots of strategies you can work on to improve your credit, but it will take effort and time. The sooner you start, the sooner you'll be positioned to buy. As a lender I've done this with many buyers over the years and it can change your life. Best of luck to you.