You Can Buy a Home With Bad Credit

One of the misconceptions among many first time home buyers is that they cannot purchase a home without upper echelon credit scores. This is flat out not the case. In fact, there are many bad credit home loans that are especially tailored to those who don't have great credit.

If you are wanting to buy a house and you have bad credit there are options for you worth researching. You will want to start by working with an excellent mortgage lender. If you're not sure who to work with and you know the real estate agent you'll be doing business with, ask them. They are bound to know who is good.

The first thing you might be surprised about is many lenders do not have set minimum credit scores. Many lenders set what they will accept based on numerous factors of the borrower. With many conventional lenders the score will be in a similar ballpark.

An excellent mortgage broker will steer you in the direction that has the highest probability of working out. Some of the best mortgage programs for those who have lower level credit come from programs through FHA and VA lenders. The are programs that are backed by the Federal government. Not only do they allow more flexible credit scores but also have lower down payment requirements.

For example, with an FHA loan you only need to have a 3.5 percent down payment. With a VA mortgage you don't need any money down. In order to get a VA loan, however, you need to have served in the military.

Even when your credit score falls below the threshold that most lenders would consider all hope is not lost. There are specialized investors who will grant mortgage to those who have very bad credit. These mortgages are known as hard money loans. There are significant downsides to these loans though given they come with super high interest rates and are usually much shorter term loans.

You would need to know your current financial situation is temporary and your credit scores will be improving rapidly. If you have bad credit but have a strong desire to get into home ownership, take a look at the article referenced from Maximum Real Estate Exposure.

The article not only gives you a more detailed overview of purchasing with bad credit but also gives you numerous ways in which to increase your credit score.

You may decide that increasing your credit score first makes more sense than trying to get a mortgage now. Your credit score can have a significant affect of the rates and conditions you'll receive from lenders.

By waiting you could get your financial house in order. A higher credit score could lead to paying for less for a home in the form of lower mortgage payments. Certainly something that is worth considering before moving forward.

Again, be sure to check out the article from Maximum Real Estate Exposure that is filled with tips for buying a home with bad credit. If you know others who would benefit from reading the article, pass it along or share it with your social media contacts.