Despite this, certain financial institutions are willing to work with clients who have less than ideal credit and provide them with loan possibilities. We researched the leading organizations in this industry. We picked the top mortgage lenders for people with terrible credit based on the minimum credit score required, the size of the down payment required, and the maximum debt-to-income ratio they would allow. Continue reading to learn how to choose a mortgage provider that meets your requirements.

HomeReady Mortgage

Due to the variety of mortgage options and homebuyer assistance programs that it offers, Prosperity Home Mortgage is the lender that we believe to be the best option overall for applicants with bad or fair credit. Although the firm does not publish its credit score criteria online, a company representative informed us that the minimum score required is about 600, which is a lower minimum than what is required by certain other lenders. In addition, it permits borrowers to have a debt-to-income ratio of up to 50 percent, which is far greater than the ratios permitted by most other lenders.

HomeReady is a mortgage option that helps borrowers in designated low-income, minority, and disaster-impacted regions become homeowners. Prosperity participates in FannieMae's HomeReady program, which helps borrowers become homeowners. Borrowers may deposit as little as a three percent down payment with the HomeReady program.

Cherry Creek Mortgage

Cherry Creek Mortgage is a leading mortgage lender that provides Veterans Affairs (VA) loans to veterans who have veteran status due to civilian employment, veterans who have been dishonorably discharged from the military, members of the Reservists, eligible surviving spouses, and current active duty military personnel.

You may be eligible for a VA loan without making a down payment or paying private mortgage insurance if you have a mortgage with Cherry Creek. Additionally, the financing cost for your VA loan may be included in the loan itself. Cherry Creek offers various alternative mortgage packages, some of which demand as little of a down payment as three percent of the total loan amount. If you have a credit score of 580 or above, you may be eligible for a loan insured by the Federal Housing Administration (FHA).

Better.Com

Because of its user-friendly and efficient online platform, Better Mortgage is our top pick among the many online mortgage lenders available today. Borrowers may obtain an estimate of their rates in a matter of seconds, and if they decide to apply for a loan, they can do the whole application process online, from beginning to end. Additionally, Better does not impose any origination fees or charges on its customers.

Better Mortgage does provide loans from the Federal Housing Administration (FHA), despite having a minimum credit score requirement of 620 for conventional loans. Assuming you have a down payment of at least ten percent, you may qualify for an FHA loan with a credit score as low as 500. This makes FHA loans an attractive option for consumers with weak credit. Better have a solid reputation for providing excellent customer service. In the J.D. Power U.S. Primary Mortgage Origination Satisfaction Study, the company was placed seventh out of 23 lenders, and it had a higher average score for the industry. Better Mortgage does not, to our regret, make available any other types of government-backed loans, such as VA or USDA loans. These loans are quite popular among borrowers who qualify for them since they do not demand a down payment; nevertheless, to use these loans, borrowers will need to deal with a different lender.

SWBC Mortgage

The average closing time for SWBC loans was the fastest out of all the lenders on this list. The lender claims that most loans are closed in less than three weeks so that you can move into your ideal house sooner. SWBC provides a variety of lending products, some of which are guaranteed by the government. These products include FHA loans, VA loans, and USDA loans. In addition, SWBC can assist customers in obtaining mortgages for renovations, jumbo loans, and conventional loans.

In addition, SWBC participates in the Veterans Housing Assistance Program (VHAP), which provides financial assistance to military veterans purchasing a house in the state of Texas. Borrowers who meet the requirements may get a loan with a little to the nonexistent down payment and may be eligible for savings on their interest rates.

How to Apply for A Mortgage

In most cases, the first step of the procedure may be initiated on the website of a mortgage provider. You may contact a representative over the phone or in person at a branch near you if you need assistance navigating the application. You may pre-qualify for a mortgage to receive an estimate of how much of a mortgage payment you will be able to afford while you are shopping for a mortgage. When a borrower applies for a pre-qualification mortgage, the lender often relies heavily on the borrower's self-reported information.