Best Mortgage Lenders for Bad Credit

Types of mortgages: Conventional, FHA, VA, jumbo, HomeReady and Home Possible, Rocket ONE+ mortgage, refinancing, home equity loans

Minimum credit score: 580 for FHA, 620 for conventional

Minimum down payment: 0% for VA, 1% for Rocket ONE+; 3% for conventional, 3.5% for FHA

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Types of mortgages: Conventional, FHA, VA, USDA, non-qualifying, jumbo, refinancing

Minimum credit score: 620 for conventional, 550 for USDA and Carrington Flexible Advantage, 500 for FHA and VA

Minimum down payment: 0% for VA, 3% for conventional, 3.5% for FHA

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Types of mortgages: Conventional, FHA, USDA, VA, jumbo, refinancing, HELOC

Minimum credit score: 620 for conventional

Minimum down payment: 5% for conventional, 3.5% for FHA, 0% for VA and USDA loans

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Minimum credit score: Not disclosed.

Types of mortgages: Conventional, FHA, VA, jumbo loans, refinancing

Minimum down payment: 0% for VA loans; 3% for conventional loans, 3.5% for FHA loans, 10% for jumbo

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Types of mortgages: Conventional, FHA, VA, USDA, jumbo, refinancing

Minimum credit score: 540 for FHA, 620 for conventional. (Guild also considers nontraditional credit sources.)

Minimum down payment: 0% for VA and Zero Down loans, 3% for conventional loans, 3.5% for FHA loans

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Types of mortgages: Conventional, FHA, VA, USDA, jumbo, refinancing

Minimum credit score: 500 for FHA, 620 for conventional

Minimum down payment: 0% for VA, 3% for conventional, 3.5% for FHA

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Types of mortgages: Conventional, VA, Military Choice, Homebuyers Choice, refinancing

Minimum credit score: Not disclosed. (Navy Federal considers non-traditional credit sources.)

Minimum down payment: 0% for VA loans, 5% for conventional loans

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Your credit score, in turn, is calculated based on several criteria: 

• Payment history (35%): Whether you pay your bills on time
• Amounts owed (30%): The Amount of credit and loans you’re using compared to your total credit limit, also known as your credit utilization rate
• Length of credit history (15%): The length of time you’ve had credit
• New credit (10%): How often you apply for and open new accounts
• Credit mix (10%): Having a variety of installment loans and revolving credit accounts, including credit cards, auto loans, mortgages and personal loans

The two biggest factors come from your record of on-time payments and the amount of credit you’ve used, which account for 65% of your score combined.

Broadly speaking, a higher credit score tells a lender you are more likely to make on-time mortgage payments.

You have options if you want to buy a home with a credit score below 620.

Consider an FHA loan

Unlike other government-backed loans, eligibility is not limited by income, location or military service.

Save for a larger down payment

The larger your down payment, the easier to get a mortgage. Some lenders say they don’t look for a minimum credit score but instead look at a borrower’s complete financial profile. Bolstering your down payment can improve that financial profile.

Get a cosigner

If your credit is not up to snuff, you may be able to get a mortgage with the help of a cosigner with good credit and a steady income stream.

A cosigner can be anyone, including a family member or friend, who agrees to assume responsibility for the mortgage if you fail to make payments.

Getting ready to apply for a mortgage? Raising your credit score is the first step.

Pay bills on time

Setting up autopay reduces the likelihood that you’ll miss a payment.

Don’t open new lines of credit

Getting a new credit card or taking out a personal loan can hurt your credit in a few ways: Applying will require a hard inquiry which can temporarily lower your score — and if you’re approved, the average age of your accounts will drop.  

Request a credit limit increase

One way to boost your credit score is to ask your credit card servicer to increase your credit limit. Provided you don’t charge anything, that will increase your available credit and lower your credit utilization rate.

Check for errors in your credit reports

Some 44% of consumers have found errors in their credit reports, according to an April 2024 study from Consumer Reports. it’s always smart to monitor your credit reports for inaccuracies, whether they’re honest mistakes or signs of fraud. You can use Aura, IdentityForce or another credit monitoring service to survey your reports from Experian, Equifax and TransUnion.

When narrowing down and ranking the best mortgages, we focused on the following features:

• Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
• Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender can cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property. 
• Closing timeline: The lenders on our list offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after.
• Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. We have noted any instances in which a particular lender does not charge these fees. 
• Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
• Streamlined application process: We considered whether lenders offered a convenient online application process and/or an in-person procedure. 
• Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
• Minimum down payment: Although minimum down payments depend on the loan type, we noted lenders that offer specialty loans with lower down payment requirements 

After reviewing the above features, we sorted our recommendations by the best for flexible terms, for non-qualifying mortgages, for refinancing, for no private mortgage insurance, for borrowers with no credit history, for quick closings and for military members and veterans.

We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.

The rates and fee structures cited for mortgages are subject to change according to company policy or the Fed rate.