Many people think a low credit score will effectively put the kibosh on their dream of home ownership. While it is true, a good FICO rating is going to make things a lot easier and terms a lot more favorable, a subterranean credit score does not effectively lock the white picket fence forever. In fact, since 2013, lenders have increasingly been approving mortgages for borrowers with credit scores under 700. While a high credit score indicates to the lender you are more likely to repay the loan, it is not the only piece of the puzzle.

First of all, what exactly constitutes a "low" credit score? Generally 661 or higher is seen as good or excellent. Low would refer to as anything in the ranges of fair: 601-660, poor: 501-600, and bad: 500 or lower. If you fall into ths category, there are several companies out there who weight other factors besides credit score more heavily. For example, if you are currently renting, providing proof of on time payments for 12 months could work significantly in your favor. Additionally, lenders might be more apt to consider a low credit score if it due to job loss rather than flat out irresponsibility. High income and/or debt to income ratio of 43% or lower can make you more attractive to lending institutions. A significant downpayment, shorter loan term, liquid assets that can be converted to cash, and a solid employment history are all factors that could influence certain lenders to look the other way regarding your credit score. 

Considering this, we found the following four companies a good bet for those with bad credit seeking mortgages...

Top 4 Mortgages for Bad Credit

Our Partner
9.8 / 10

Since 1996, the North Carolina-based LendingTree has funded over $251 billion in closed loan transactions. The company operates one of the largest network of lenders in the nation, and can consequently connect borrowers with all types of financial institutions, some of which may put less an emphasis on credit scores than others. And seeing as you must first provide a credit score range during the initial quote process, LendingTree will only be linking you with providers who are willing to work with the score.

Our Partner
9.7 / 10

Founded in 1991, J.G. Wentworth provides mortgages, mortgage refinance, personal loans, annuities, and lottery payment purchasing. What makes the company good for those with bad credit is its robust Federal Housing Administration (FHA) component. FHA loans are federally insured mortgages designed for low income borrowers. Those with credit scores above 580 qualify for a 3.5% down payment. Those below 580 must pay 10%. Those taking out FHA loans must pay for mortgage insurance. This consists of an up front premium as well as a monthly premium. This fee allows the federal government to insure the loan in the event you default, making you and your low credit score less of a risk to the individual lender.

Our Partner
9.1 / 10

Rocket Mortgage is as a subsidiary of Quicken Loans. It is Quicken's online-only interface and was designed to provide a wholly virtual and rapid lending experience where you don't have to talk to loan officers. Though the site offers FHA loans for credit scores as low as 580, Rocket Mortgage also offers traditional mortgages for those with credit scores of 620 or better, which is still in the "fair" range. Rocket Mortgage also offers Freddie Mac and Fannie Mae loan products that will accept 3% down payments. However, the company along with Quicken loans will not typically look at alternative data. So even though the credit standards are low, if for whatever reason you don't qualify there won't be other information they take into account.

8.6 / 10

California based loanDepot is the fifth largest mortgage provider, and the second largest non-bank lender in the country. Reviews of the company on the BBB and other online entities are overwhelmingly positive. loanDepot offers FHA and traditional mortgages for credit scores as low as 600. However, though this is low, as with Rocket Mortgage loanDepot does not take into consideration much other information besides credit scores and LTV ratios.

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