542 Credit Score Mortgage

Options for getting a mortgage loan with 542 Credit score

With 542 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.

FHA, Fannie-Freddie, VA, USDA and Subprime, Non-QM loans

With poor credit of 542 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.


542 credit score mortgage

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Private money lenders for credit score 542

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$ 61.01$ 61.11$ 62.78% 50.68%
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 2.95 3 3.73 3.48 3.79
Rate 7.31% 11.23% 12.12% 11.63% 13.32%
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.

How mortgage brokers rip you off

542 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.

Improve your credit score for mortgage

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


List of lenders who consider lending to borrowers with 542 credit:

  • Financial Concepts Mortgage
  • 2949 S Bryant Ave, Edmond, OK, 73013
  • Financial Concepts Mortgage is locally owned and operated. Founded in 2001, our team has more than 50 years of combined mortgage lending experience. We pride ourselves on offering some of the lowest rates nationwide as well as a home loan application process that’s quick and simple for prospective homeowners in OK, KS, TX, AR, AL
  • TENA Companies, Inc.
  • 251 West Lafayette Frontage Road S, Saint Paul, MN, 55107
  • TENA is dedicated to leveraging its deep industry experience and comprehensive approach to Quality Control to provide clients the information and technology necessary to navigate compliance challenges faced in the mortgage industry.We provide the highest quality products and services and develop long-term.
  • Mountain Lifestyles Mortgage
  • 1200 Bleachery Blvd, Asheville, NC, 28803
  • We specialize in USDA Loans in Buncombe, Henderson, Madison, Transylvania, Haywood McDowell, Polk and Rutherfordton County. We also serve the cities surrounding Asheville such as Hendersonville, Weaverville, Marshall, Brevard, Candler, Waynesville, Etowah, Mills River, Burnsville, Spruce Pine, Black Mountain, Swannanoa, and Old Fort.
  • Levias Lending LLC
  • 1101 Marina Village Pkwy, Suite 201, Alameda, CA, 94501
  • At Levias Lending LLC. We are a full-service mortgage company based in Alameda, CA. We specialize in Home Purchase Loans and Refinance in Alameda. We also serve the surrounding cities in Alameda County. Whether you are buying a home or ReFinancing in the zip code 94501, we can help you realize your dream of homeownership
  • LendRight Mortgage
  • 1447 East Annie Lace Way, Draper, UT, 84020
  • At LendRight Mortgage! My name is Rodney Rex, the owner and principal lending manager. I won’t bore you with facts about my 17-year history in this business. We are based in Draper, UT. We have shifted our workforce completely to remote work. If you need to send any physical mail correspondence, broker checks, etc.
  • Flagstar Bank
  • 301 West Michigan Avenue, Suite 4-501, Jackson, MI, 49201
  • At Flagstar, we believe in the Human Interest Rate. It’s not the interest rate other banks talk about, but we do. We have genuine interest in helping our customers achieve their financial goals and bringing solutions within reach. While you’re here, please reach out to us any time.
  • Southwind Mortgage Services
  • 208 Bucktail Drive, Wilmington, DE, 19808
  • Serving Delaware homeowners since 2005, whether you are refinancing your current home or purchasing a new home, Southwind Mortgage Services is a leader in the mortgage industry. Your most expensive asset requires a mortgage consultant who is knowledgeable is aware of your financial objectives & can tailor your needs into the best mortgage product
  • Marshfield Medical Center Credit Union
  • 302 W Upham Street, Marshfield, WI, 54449
  • Marshfield Medical Center Credit Union was chartered in 1965 under laws of the State of Wisconsin by employees of St. Joseph’s Hospital. Until 1985 the credit union operated from office space in the hospital. That year we relocated to our own facility. Since then we have added numerous services and enjoyed exceptional growth.