<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=262189827814310&amp;ev=PageView&amp;noscript=1">

Amerifirst blog

 Explore our blog for insights on buying, financing, remodeling, and taking care of your home.

Back to all posts

First Time Home Buyer Loans for People with Bad Credit

Woman Looking at laptopWhat exactly is bad credit? Let's start with the lower end of generally accepted credit scores* for borrowers. If your credit score sits below the 600 mark, you'll have a difficult time getting a first time home buyer loan. As you inch towards a 620 FICO score, your "borrower risk" begins to fall in the eyes of most lenders; 640 and above and you're getting into the safe zone for most loan options.


What does this mean for people with bad credit? It means it's time to work on bringing that FICO credit score up, up, up. 


Get our Mortgage Ready Credit ebook here.


There's no such thing as a quick-fix for credit problems. Regardless of the reason  - and we all have valid, real reasons when it comes to credit history hiccups - a low score is seen as a risk to lenders.  So how do you improve your credit? By showing that you're a responsible consumer who pays your bills. And that takes time and effort. 


Also, understand that a bankruptcy, a foreclosure or a short sale in your recent history will affect your credit score and your chances of finding any kind of first time home buyer loans. A short sale will keep you from getting a mortgage for 3 years; a bankruptcy will keep you from getting a mortgage for 2 years from the discharge date (depending on some factors). 


Let's look at how you can begin to repair that credit. Two of the biggest steps are:

  1. Paying your bills on time and
  2. Bringing your credit card balances down

As far as paying bills on time, this goes for all of your bills, every month, for a year. This is where patience comes into play. Next, your balances. Credit card balances should not exceed 30% of the limit. In other words a $10,000 limit credit card should have less than $3,000 charged on it. Read more about repairing your credit in the article First Time Home Buyers and Credit: 6 Mistakes to Avoid.


The bottom line is that if you have bad credit, you're not going to find any magic first time home buyer loans. It takes patience and effort. Want to learn more about getting your credit mortgage ready? Download "The  Mortgage-Ready Credit" at the button below. The free eBook walks you through the factors that make up your credit score, ways to protect yourself and other information. Get your copy today!


Understanding your Credit


*these numbers are not intended to be hard and fast numbers, as loan programs do not generally have minimum credit scores, and they are to be used as a guideline

Related Posts

My forbearance is ending. Now what?

It’s been a tough couple of years. And with incomes stretched tight, some homeowners may have entered a forbearance on their mortgages. This special agreement between lender and borrower gives homeowners a little breathing room, allowing them to delay or reduce mortgage payments to their lenders over a certain period of time. 

National Hispanic Heritage Month: What it Means to Me

National Hispanic Heritage Month, September 15 - October 15,  celebrates the history, cultures and contributions of Hispanics in the United States.

10 Ways to Get Your Offer Accepted in a Tight Housing Market

No single strategy can guarantee success, but there are ways you can strengthen your offer and make it more attractive to sellers.


Call us



Get started

Apply online today