Imperfect Credit? Your Path to Owning a Home in Houston Is Closer Than You Think

Many Houston renters assume their credit score is the end of the conversation. They've had a few late payments, a collection, or a rough year, so they don't even apply. Credit does matter, but it's only one part of the decision, and many buyers qualify sooner than they expect.

What lenders really look at

When you apply for a mortgage, the lender looks at your whole picture, not only your score:

• Credit history: your score, plus recent late payments, collections, and how you've handled debt over the last 12–24 months
• Income and job stability: steady, documented income
• Debt-to-income ratio (DTI): how much of your monthly income already goes to debt payments
• Down payment and savings: money for the down payment, closing costs, and reserves

A borrower with a lower score but steady income, low debt, and a clean last 12 months can often qualify sooner than a borrower with a higher score and maxed-out credit cards.

The real credit-score numbers

Here are the general guidelines for the most common loan types:

• FHA loans: a 580+ score can qualify for as little as 3.5% down. Scores from 500–579 may still qualify with 10% down.
• Conventional loans (Fannie Mae / Freddie Mac): the agencies dropped their hard 620 minimum score. Their automated underwriting systems now look at your full credit profile. Many lenders still set their own minimums, though, so your options depend on the whole file.
• VA loans: for eligible veterans and service members, VA doesn't set a minimum score. Lenders set their own, often in the 580–620 range.

Guidelines change and individual lenders can have stricter requirements. A pre-approval is the only way to know exactly where you stand.

Texas and Houston programs that can help

Even buyers whose credit isn't perfect may be able to use down payment and closing cost help:

• TSAHC (Texas State Affordable Housing Corporation): down payment assistance and mortgage credit certificates for eligible buyers
• TDHCA My First Texas Home: assistance for first-time buyers who meet income limits
• City of Houston Homebuyer Assistance Program (HAP): help for income-eligible buyers purchasing inside Houston city limits

Each program has its own credit, income, and property rules. We'll help you check which ones fit your situation.

Your 5-step plan to get mortgage-ready

1. Pull your credit reports. You can get free reports from all three bureaus at AnnualCreditReport.com. Look for errors, accounts you don't recognize, and old balances.
2. Dispute what's inaccurate. Incorrect late payments, duplicate collections, and accounts that aren't yours can lower your score. You have the right to dispute them.
3. Lower your credit card balances. Keeping balances under about 30% of each card's limit (under 10% is even better) is one of the fastest ways to raise a score.
4. Make every payment on time from here on. Lenders pay close attention to the most recent 12 months.
5. Don't open new credit while you prepare. New cards and auto loans add hard inquiries and new debt right when you need your numbers to look their best.

How The Closing Table helps

Most people get a "no" from a lender and walk away. We do it differently. We review your credit and income with you, show you exactly what's holding you back, and give you a plan. If your credit needs work first, our credit-improvement service helps you fix errors and build a stronger profile. When you're ready, our mortgage team takes you from pre-approval to the closing table.

Every situation is different, and we can't promise a specific score or approval. What we can promise is a clear, honest look at where you stand and what it will take.

Ready to find out where you stand?

Book a free, no-pressure credit and home-buying review with Jay today. We'll go over your credit, talk through your goals, and map out your path to owning a home in Houston, whether that's 30 days or 12 months from now.

Contact us at closingtablehouston.com to get started.