Buy a Home With Bad Credit
Rent To Buy
Rent to buy is an excellent route into property ownership for many people with bad credit. The rental period will prove that you are able to handle the monthly payments for a year or more, which will make it much easier to secure a mortgage on the house when you are ready to buy.
Furthermore, every rent payment becomes equity in the property, which means that you essentially pay your deposit while living in the home. Only having to deal with the current homeowner in many cases is also an added bonus, as they can treat you like a tenant rather than a homeowner.
Research Federal Mortgage Programs
Many people actually qualify for federal assistance in securing a mortgage and may not even realise it. Speak to a qualified real estate agent and they will be able to let you know if your current situation means that you are able to take part in a federal mortgage program like the ones offered by the Veteran’s Administration or the Federal Housing Administration.
There are also a number of state-wide and local programs that also offer assistance to those who are trying to get on the property ladder despite having bad credit, so it is always worth consulting them before trying to buy a home.
Avoid Bad Lenders
If you ever find yourself in a situation where you are sat in a lender’s office with a contract that you don’t really understand, and you feel like the lender is placing far too much pressure on you to sign the contract there and then, you may be about to become a victim of a bad lender.
Avoid situations like this and only contact legitimate and reputable financial institutions for a loan. Never sign anything that you don’t understand and refuse to sign if you feel like pressure is being placed on you.
Create Good Credit
Of course, if you are not in a rush to find a home then you can take some time to do the things that need to be done to turn your bad credit score into a good one.
Make sure that any payments that you need to make are done on time and be sure to speak to a financial advisor so that you know where you stand. Sometimes you may have fallen into bad credit for reasons beyond your control, so try to explain the issues that led to the problem as well.