Definition of Underserved Home Buyers
Any potential borrower that may have had minor credit problems in the past, has a FICO credit score below 680, might struggle to come up with the down payment required to purchase a home, but otherwise are well-qualified. These are the people who are considered underserved buyers.
History & Origins
Many prospective homebuyers haven’t taken action to buy a home for a number of reasons, including sub-par credit, lack of a significant down-payment and closing costs, little or no financial investments and/or debt from student loans, or other types of accrued financial obligations. These fears can stop many from pursuing the dream of homeownership.
But there’s great news! In the last few years, lenders have begun to better accommodate the underserved market by taking action to help those who have not traditionally been given many options.
Real Life Applications
Underserved borrowers tend to view a mortgage as something unattainable, complex and cumbersome. But some lenders have created a path for underserved borrowers by developing initiatives and programs for these customers, which are designed to help them gain their financial footing.
For example, Carrington has taken steps to assist underserved borrowers by lowering the minimum credit score required to get a loan, expanding guidelines and relaxing other approval conditions on a number of programs popular with first-time homebuyers.
The Last Word
Learning more about the home-buying process and available loan options will help to remove some of the anxiety related to obtaining a mortgage, especially for those who may have challenged credit or difficulties coming up with a down payment. Look for a lender that will work with your individual situation and is willing to educate you about your options.