Friday, June 14

How to Get a House with Bad Credit

Eve couldn’t be happier to be pregnant with her 3rd child.

But she couldn’t help but wonder; when the new baby came, would there be enough space for everyone?

With housing prices being so high and her credit being so low, Eve just assumed she had to stay put. What she didn’t know is that there are ways to secure a mortgage, even with a low credit score.

If bad credit is holding you back from making a move, this article’s for you. How can you get a house with bad credit? Read on to find out.

Know Your Score to Buy a House

Before you can get a house with a bad credit score, you need to know where you stand. Do you know why your credit score is low? If not, now’s the time to find out what’s causing your low score.

Do you have an outstanding debt that you could start making payments towards? Are you dealing with a bad credit utilization ratio?

You might feel like fixing your credit score is a hopeless venture, but it’s not. By taking a few easy steps to improve your credit score before you start home shopping, you’ll be able to get a better deal.

We suggest pulling your credit score now and checking it for any errors. You can pull a free credit score from Experian, Equifax, or Transunion sites.

Find out if you can pay down any revolving credit lines so that you lower your credit utilization percentage. You could also consult with a credit repair service to help get your numbers up. Boosting your score by a couple of points could save you thousands of dollars, so it’s worth looking into.

Change Your Mindset

If even thinking about pulling your credit report stresses you out, you might have a poor relationship with your finances. By practicing empowering money mantras, you can help change your mindset.

Go from, “I can’t” to “I can” with these positive money affirmations. Then take things one step further as you begin looking into different home loans.

Bad Credit Home Loan

Even after boosting your credit score, you might still have what’s considered low credit. Thankfully, there are a lot of low-credit home loans available.

You could look into a federal housing administration loan or a VA loan. You could also look into getting a USDA loan, a conventional loan, a Fannie Mae home-ready loan, or a non-qualified mortgage loan.

The loan that you qualify for will depend on your income and credit score. Factors such as the home’s location can matter too.

For instance, with USDA loans, the house has to be in a rural area. However, sometimes suburbs make the cut for special situations.

USDA Income and Property Eligibility

Along with making a certain income and having the home located in a rural area, there are other criteria to meet with a USDA home loan. First, you’ll need to select which USDA loan program will best suit your needs.

For instance, there’s a single-family housing guaranteed program. There’s also the multi-family housing program. You could even look into the single-family housing guaranteed program.

The single-family housing guaranteed program is also referred to as section 502. It assists individuals who have a low to moderate-income and or low credit scores. You should also check out no credit homes for sale since these purchases don’t use your credit as a reference.

VA Home Loan Requirements

Another way to get a house with bad credit is to apply for a VA loan. How can you qualify for one of those? You might be able to get a VA loan if you didn’t receive a dishonorable discharge.

You’ll also have to meet the minimum active duty service requirements during your time of service. For instance, individuals who served between 1940 and 1947 will need at least 90 days of active duty service.

Anyone who served between 1990 and the present Gulf war will need at least 24 months of continuous service. Applying for a VA loan is easy, and you can do it all online.

If you don’t meet the minimum service requirements, you might still qualify for a VA loan. For example, if your discharge was for a hardship or medical condition, you might still qualify for a loan.

As long as your discharge wasn’t dishonorable or based on bad conduct, it’s worth your time looking into an application. You can also find out how to apply for a discharge upgrade online.

Tips for Finding the Best Mortgage Companies

Whatever route you decide to take, there are a few mortgage hunting tips you’ll want to follow. For starters, you should always shop around.

Every lender is different. Just because your low credit doesn’t qualify with one lender, it doesn’t mean somebody else won’t be willing to work with you. You should also get multiple quotes so that you can find the best deal.

Have you thought about using a co-signer? If you have low credit, a family member with excellent credit could cosign your mortgage. Mortgage companies love the peace of mind a cosigner brings to the table, which gives you a better chance of approval!

You could also look into different down payment assistance programs. If you need to get a mortgage and have poor credit, there are Nationwide down payment assistance programs to help.

Finally, avoid making any significant changes to your finances. Making a big purchase could lower your credit score even more. Whatever you do, avoid taking on any new debt until you finalize the mortgage process.

You Can Get a House With Bad Credit

As you can see, it is possible to get a house with bad credit. Now that you know about the different loans available, you should feel hopeful about your home buying prospects.

Don’t wait to make a move. Pull your credit report today, and check for any errors. Then make a list of things you can do to start boosting your credit score.

Remember, you only need to boost your score by a few points to save thousands of dollars on your loan. What other ways can you move forward? Look around our website to find out.