With a 520 credit score, your options include Non-QM loans and Bank Statement loans. Non-QM loans use alternative underwriting criteria and may accept lower credit scores with compensating factors like larger down payments or significant cash reserves. Bank Statement loans are ideal for self-employed borrowers who can demonstrate income through 12-24 months of bank statements rather than traditional tax returns.

FHA loans technically allow scores as low as 500 with a 10% down payment, but most lenders set their own minimum at 580. Finding a lender willing to approve an FHA loan at 520 is challenging. NMHL can help determine if you qualify or recommend the fastest path to reaching the 580 threshold for better FHA terms.

Compared to a borrower with a 720 score, you could pay 3-5% more in interest annually. On a $250,000 loan, that translates to approximately $625-$1,040 more per month in mortgage payments. Over 30 years, the total additional cost can exceed $200,000, which is why improving your score before buying can save enormous amounts of money.

A Bank Statement loan allows self-employed borrowers and those with non-traditional income to qualify using 12-24 months of personal or business bank statements instead of W-2s and tax returns. Lenders calculate your average monthly deposits to determine qualifying income. These loans typically require a minimum 15-20% down payment and carry slightly higher interest rates than conventional loans.