How to Obtain a Mortgage with Low Income and Good Credit

Purchasing a home is a considerable investment. While purchasing a home may seem out of reach, there are a variety of programs working with low-to-moderate income buyers to turn homeownership into a reality.

Saving Money

When looking to buy a home, start by saving at least 5% for the down payment.

Save money for your new home by establishing a monthly budget. Additional ways to save may include working a second job or lowing you monthly rent by living with a roommate. Sticking to a budget is the best way to reduce expenses and increase savings.

Credit Score

Your credit score is a vital part in the lending process. Credit scores are built by factoring characteristics such as payment history, credit mix, length of credit history, and debt-to-income ratio.

Maintaining a good credit score increases opportunities for a lower mortgage rate, better insurance rates, and possible approval for higher credit limits. Credit scores show the lender your ability to pay back the mortgage loan. A 725 credit score will have a decent impact on your interest rate and you may be offered interest rates 0.25% lower than if you had a score under 700. The higher your credit score is, the better chance you have of getting a lower rate!

With a low income and a good credit score, getting a mortgage is a definite possibility. Connect with a mortgage lender and they will work with you through the home purchasing process.