Home Financing Options for Any Credit Score in Kentucky

Having perfect credit and a down payment of as much as 20% is not always possible. There are financing options that are available for any credit score, especially when you consider FHA mortgages and how FHA home loans work. Especially if you’re out looking to buy your first home, it’s smart to learn about all of your home financing options.

Photo of a young man comparing home financing options.
It’s smart to do your homework. Comparing home financing options will save you money in the long run.

Knowing what your options are in terms of home loans, mortgages, and everything in between is crucial if you don’t have perfect credit.

What FHA Loans Are and Their Requirements

FHA loans come from the Federal Housing Administration, which is an agency run by the government and created by the US Department of Housing. It is also known as the HUD. FHA loans are designed to give potential homeowners the chance to own a home, therefore increasing homeownership across the United States.

You can have a credit score as low as 580 and a down payment as low as 3.5% and receive an FHA mortgage loan and qualifying rate. The average down payment on an FHA home loan is $6,624.

In order to qualify, you as a borrower must have a credit score of at least 500 for a loan-to-value ratio of up to 90%. Another option would be if you have a down payment of 10% then the credit score isn’t as important.

The FHA-approved appraiser must conduct an appraisal of the property. You must have steady, regular employment that you can prove in terms of income using your most recent tax returns, paycheck stubs, and W2s. Also, you must be at least 18 years old and occupy the home in question as your primary residence.

To see how much you qualify for, you can use the FHA Loan Calculator.

Alternative Mortgage Rates and Offers

Poor to bad credit can make it extremely difficult to find any option whatsoever, even when it comes to qualifying for an FHA loan. If you’ve run out of all your options, there are other ways you can shop around, compare mortgage rates, and view offers available to you.

Homeloansforall.com, for example, helps you to find resources for poor to bad credit scores based on your city and state. Resources such as this can help you figure out where you’re at. Then, you can make an informed decision and the right choice based on your personal situation.

Improving Your Credit Score for a Better Rating

Photo of a young family
If home ownership is a dream of yours, it’s smart to understand what financing options are available to you.

Improving and raising your credit score is a process that you have to stick to and keep going. Even if it will take a long time… you can do it!. The time will go by faster if you really dig deep and do your best to make the necessary changes to your life.

For starters, keep a low balance on your credit cards. This is big. Also, pay down any other debts you may have. Having a high amount of outstanding debt is the number one way to hurt your credit score.

Setting up some payment reminders, whether it’s marking dates on a calendar or setting alarms on your phone, is a smart way to ensure that you never miss a payment. You can also check with your bank to see if they have reminder methods through their online banking portal, through text messages, emails, etc. Automatic payments may also be set up through loan providers, your bank, and credit card companies, as well, so it’s worth finding out whether or not that can be done.

Creditors sometimes have legitimate credit counselors available. These people can help you make sense of your situation. They can offer advice on what you need to get back on track and improve your credit score. Often these counselors are completely free.

Fixing your credit score isn’t going to be a quick process. However, the more you dedicate yourself to doing so, the less time it will take. It’s not easy, but anyone can do it.

Financing Options in Kentucky

It can be confusing to go through your financing options. If you have a poor credit score then it’s even more frustrating. But millions have overcome these hurdles.

Going over what you can do, where you can get help, and making changes to improve your credit score is important in order to get the best financing options available to you.

If you’re interested in the entire process, check out the Home Buying Process: From A-to-Z in 18 Steps.

Tre Pryor, Realtor

Tre Pryor is the leading real estate expert in the city of Louisville. He is a multi-million dollar producer and consistently ranks in the top 1% of Louisville Realtors for homes sold. Tre Pryor has the highest possible rating—5.0 stars on Google—by his clients and is routinely interviewed by the local NBC news. Tre Pryor is a member of the RE/MAX Hall of Fame.