With 545 credit score, you have several options for a mortgage. Purchase or refinance through FHA or financing by private money lenders, aka hard money lenders. To obtain a HUD FHA loan, you must have at least 10% down and compensating factors such as low DTI (Debt to Income ratio), stable income, and reserves.
With poor credit of 545 you are not eligible for Conventional (Fannie- Freddie) loans, Va, or USDA. To find out if you are qualified for an FHA loan, explore https://www.hud.gov/program_offices/housing . You may be able to get a Subprime loan with LTV under 65%. Find out wht loan you qualify for with our FHA /Subprime eligibility calculator If your credit score is 580 or higher, you may need only a 3.5% down payment.
Despite having a low credit score, Private investors will refinance your mortgage as long as you have enough equity in the property or you put in a large down payment.
| Owner-Occupied Residential FHA | Owner-Occupied Residential Hard Money | Non-Owner-Occupied Residential | Commercial | Vacant Land | |
|---|---|---|---|---|---|
| Max Loan to Value | 90$ | 61.06$ | 61.16$ | 62.86% | 50.71% |
| Programs | FHA | Hard Money | Hard Money | Hard Money | Hard Money |
| Vesting | Natural name | Natural, Corporation, LLC | Natural, Corporation, LLC | Natural, Corporation, LLC | Natural, Corporation, LLC |
| Tax Returns | 2 years tax- Must | documents showing ATR | Alt documents or equity-only loans | Alt documents or equity-only loans | Alt documents or equity-only loans |
| Points | 2.93 | 2.99 | 3.72 | 3.47 | 3.78 |
| Rate | 7.3% | 11.22% | 12.11% | 11.62% | 13.31% |
| Loan terms | 30 years or 15 years | 1—5 years | 1—5 years | 1-7 years | 1-3 years |
| Property Condition | Good condition | Any | Any include Fixer-Upper | Any | Unentitled land reduce LTV to 29.23 |
The Rates & Terms depend on the Loan-to-Value, credit, property location, condition, and local real estate market condition. Unlike the FHA loan, which has standard underwriting, private money loan programs differ significantly between lenders. It behooves you to contact and get quotes from at least three lenders before you make a decision. See a list of potential hard money lenders or use the Lendersa form to shop for your loan simultaneously with hundreds of private money lenders.
545 is a low score; unfortunately, a small percentage of mortgage brokers could take advantage of your credit disadvantage by trying to charge you an arm and a leg. Therefore, it would be best if you compared 3-10 lenders' programs before deciding on the best lender, thus avoiding mortgage brokers' rip-offs and loan sharks.
Credit scores of 625 or above will open the door for more loan programs and better rates & terms. If you are not rushing to refinance or purchase a property, consider raising your credit score before attempting a loan review. Check our recommended resources to improve your credit at the bottom of the page Improving your credit score will enhance your chances for better loans. Understanding how credit scores work is the first step to raising your credit.
Here are a few links to resources that could raise your credit score: https://www.usa.gov/credit-reports https://www.fanniemae.com/crediteducation https://myhome.freddiemac.com/refinancing
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