Best mortgage lenders with bad credit in 2022

If you have less than perfect credit and are looking to buy a home or refinance your mortgage, there are low credit mortgage lenders with options for you. Bankrate has made it easy to find lenders who provide bad credit home loans, based on criteria such as the lowest minimum credit score requirement, the widest range of lending programs for low credit borrowers and down payment assistance. Here’s our guide to the best mortgage lenders for low credit borrowers in 2022.


To determine the best mortgage lenders for low-credit borrowers, Bankrate evaluated lenders based on several criteria, including the availability of low-credit or low-payment loan programs; credit score requirements and flexible underwriting.

Best Mortgage Lenders for Borrowers with Low or Bad Credit

Rocket Mortgage

Rocket Mortgage Review

Loan products Purchase and refinancing; conventional, jumbo, FHA, VA, investment property, flex-term
Credit requirements 620 for conventional loans; 680 for jumbo loans; 580 for FHA loans and VA loans
  • Quick quotes
  • Seamless online application that lets you connect bank accounts to verify assets and income
  • Rated highest in customer satisfaction by JD Power from 2014 to 2020
The inconvenients
  • No branch
  • USDA loans not available
  • Price lists not available in advance
Highlight Rocket Mortgage is a valid option for borrowers who prefer a convenient digital lending experience.

Carrington Mortgage Services

Carrington Mortgage Services Review

Loan products Purchase and refinancing; conventional, FHA, VA, USDA, non-QM
Credit requirements 620 for conventional loans; 500 for FHA loans and VA loans; 500 for non QM
  • Several loan options for borrowers in credit difficulty
  • Personalized support from a dedicated loan officer
  • Low down payment loan products for first time home buyers
The inconvenients
  • Loans not offered in Massachusetts and North Dakota
  • Must connect directly with a loan officer to be prequalified and apply for a loan
Highlight Carrington Mortgage Services offers an assortment of outstanding mortgages and support in person or over the phone.

Flagstar Bank

Flagstar Bank Mortgage Review

Loan products Purchase and refinancing; conventional, jumbo, FHA, VA, USDA, home equity loans, construction and renovation loans
Credit requirements 620 for conventional loans; 700 for jumbo loans; 580 for FHA loans
  • Rated A+ by the Better Business Bureau (BBB)
  • Available in all 50 states
  • Government-backed programs and flexible mortgage options for borrowers in credit difficulty
  • Up to $5,000 for your down payment or closing costs with the Flagstar Gift Program
  • Up to $2,500 in down payment assistance and $7,500 if you use Detroit Land Bank to buy a home
  • No assembly costs
The inconvenients
Highlight Flagstar Bank offers down payment and closing cost assistance to help you realize your dreams of home ownership, even if you’ve had credit problems before.

Bank of America

Bank of America Mortgage Review

Loan products Purchase and refinancing; conventional, jumbo, FHA, VA, home equity line of credit (HELOC)
Credit requirements 620 for conventional loans; 680 for jumbo loans
  • Simplified online application process
  • Government-backed mortgage options for borrowers with lower credit scores
  • Mortgage Affordable loan solution with 3% down payment and no mortgage insurance
  • Interest rates posted online and updated daily
  • Over 4,000 branches nationwide for in-person support
The inconvenients
Highlight Bank of America offers two grant programs: one is a credit from the lender of up to $7,500 for closing costs or to reduce the rate, and the other is up to $10,000 that can be used for the down payment. .

Liberty Mortgage

Freedom Mortgage Review

Loan products Purchase and refinancing; conventional, jumbo, FHA, VA, USDA, HELOC, construction and renovation loans, investment properties
Credit requirements 620 for conventional loans and VA loans; 580 for FHA loans
  • Available in all 50 states
  • Get help from a dedicated local mortgage agent
The inconvenients
  • Branches not located in all states
  • Rates not published online
Highlight Freedom Mortgage is one of the top FHA and VA lenders, which may have more flexible credit requirements.

Can I get approved for a mortgage with bad credit?

It is possible to qualify for a mortgage even if your credit is bad, weak or poor. In fact, the US Department of Housing and Urban Development (HUD) reports that the share of mortgages going to borrowers with credit scores below 620 has steadily increased in recent years.

You can also improve your chances of getting mortgage approval if you apply with a co-borrower or co-signer who has good credit. Note that a co-borrower owns the property, but not a co-signer, so the latter might be the best option if you’re just looking to give your credit profile a boost.

What type of mortgage can I qualify for with bad credit?

Types of mortgages to consider if you have bad credit include:

  • FHA Loans
  • AV loans
  • USDA Loans
  • Ineligible mortgages (non-QM)

Beware of mortgage products that tout “guaranteed approval” without a credit check, or other offers with too-good-to-be-true claims. They are most likely bad actors, and going this route can potentially hurt your credit even further.

What is the lowest credit score needed for a mortgage loan?

The lowest credit score you need to qualify for a mortgage depends on the loan program and lender. Conventional loans typically have a minimum credit score of 620, but borrowers with higher credit scores tend to get better rates. FHA, VA, and USDA loans have lower minimum credit score requirements than conventional loans, and might make more sense to you if your credit needs improvement.

How a low credit score affects your mortgage

The lowest interest rates are granted to borrowers with the highest credit ratings. Borrowers with lower scores have higher rates and potentially pay higher financing costs because they pose more risk to the lender. If you have a lower score, you could be spending several thousand more in interest over the life of your mortgage.

Say you get a $350,000 30-year mortgage with a fixed rate of 4.5%. Your monthly payment (for principal and interest only) would be $1,773 and you would pay $288,583 in interest over the term of the 30-year loan.

If you could improve your credit and get a rate of 3.75% instead, your monthly payment would drop to $1,620 and you would pay $233,800 in interest for the term of the loan. This represents a savings of approximately $54,800. You can use Bankrate’s Mortgage Calculator to compare different scenarios with higher and lower rates.

How to get a mortgage with bad credit

A bad credit score doesn’t automatically mean you won’t be approved for a mortgage, but you can expect to pay more for the loan. You might also have fewer options to choose from. Follow these tips to increase your chances of approval:

  • Shop with lenders who specialize in mortgages for borrowers in credit difficulty.
  • Consider using a credit union or online lender, which may have more flexible loan options.
  • Look into government-backed loan programs, as they usually have less stringent qualification criteria.
  • Ask a trusted friend or relative with excellent credit to co-sign your mortgage.
  • Stop charging credit cards and avoid opening new credit accounts before applying for your mortgage, as well as during the application process.

How to refinance a mortgage with bad credit

If you’re concerned that your credit score is too low to refinance your mortgage, consider these options:

  1. Wait and work to improve your credit score to potentially qualify for a lower rate.
  2. Inquire about refinancing with your current lender, who may approve you based on the relationship you have established with their institution.
  3. Consider rate-and-term or streamlined FHA refinance (or VA or USDA streamlined refinance, if eligible).
  4. Explore portfolio lenders that offer refinancing, as they may have more flexibility.
  5. Get a co-signer with a strong credit history and a substantial amount of savings or other assets.

How to improve your credit score

It’s best to seek a higher credit score before applying for a mortgage, even if you’ve had serious problems in the past. You could increase your chances of being approved and possibly benefit from a more competitive interest rate. Here are a few tips:

  1. Review your three credit reports from the credit bureaus free of charge at com. Contact the agency as soon as possible if you find any errors or inaccuracies so that they can be resolved quickly.
  2. Pay all your bills on time and in full, if possible.
  3. Although it may be tempting to cut off access altogether, close credit cards with caution. Your credit score can drop if you close an account. You better not use the card or use it sparingly and pay it off quickly.
  4. If your credit history is poor, ask a family member or friend to add you as an authorized user to their existing credit card. This can help you establish your credit history.
  5. Don’t apply for new credit too frequently, especially before applying for a mortgage and during the loan underwriting process.
  6. Sign up for the Experian Boost or UltraFICO program. These free programs take into account your bill payment history and bank details, respectively, which can help improve your credit score.
  7. If you need more help, consider consulting a credit counseling agency. Just beware of debt settlement agents, who often give bad advice but pose as reputable credit counselors.

Summary: Best Mortgage Lenders for Borrowers with Low or Bad Credit

With additional reporting by Allison Martin

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