Purchase a Home with Bad Credit
There are many reasons that people
fall behind in their bills. There may have been a layoff at work
and it took you several months to get a new job. You may have had
some serious medical bills that it has taken some time to catch up on. If you have fallen behind on some payments but are now back on track, your
credit score will take a while to improve again. If you have been
planning to purchase a home and wondered if you could even though your credit isn't as good as it was, you will
be glad to know that you can get a bad credit mortgage that is designed for people with less than
Of course, your credit
score is not the only factor that the lender will look at when you apply for a bad credit mortgage or mortgage refinancing. He will look at your overall financial situation including your credit score
and your credit history. Here are some tips to help you buy a home
with bad credit.
First, spend less money
than you make, and save what you don't spend. This sounds like
simple advice, but it is a very important factor in purchasing a home. Even with an FHA loan that requires the lowest down payment, you will need to
have not only the down payment, but cash reserves for at least two or three months worth of house payments and
enough to cover all of the closing costs. If you are able to save
money, it shows that you are financially stable.
Next, don't change jobs
or careers right before you buy a home. If a job change is coming
up, you should get your home purchased before the change, or you may have to wait 2 years unless the job is in
your same industry. The lender wants to see a 2 year employment
history in the same field.
Talk to a loan officer
before you consult a realtor. Getting a mortgage with bad credit
will mean that you have stricter requirements. If you are up-front
about your financial situation with the loan officer, you will know what type of loan you can qualify for and
the minimum down payment you need. Don't open a new credit account or have your credit run for at least 6 months
before you want to purchase your house. Even if you don't accept a
new card, if you apply it shows on your credit report.
Remember that even
though your credit isn't the greatest, you can still get a mortgage refinance or a bad credit mortgage