One thing is for certain, buying a home when you have bad credit is a difficulty endeavour. However, there’s plenty of reason to be optimistic. It is possible to buy a house with bad credit. And here are 3 reasons why.
Check your Credit Score
The first thing you need to do before looking into buying a house is to check your credit score. There are plenty of places online where you can check your credit and get your free credit score. A couple of good examples are Credit Karma and Credit Sesame, they allow you to view your credit report and credit scores for free. You don’t need to sign up for a trial account using your credit card, these services are completely free.
Credit Score Types
You have three credit scores, one from each credit bureau. Mortgage lenders use your median credit score to rate your credit worthiness. When you have all three scores, throw out the highest and lowest score and you are left with the middle score, this is the one that lenders will use.
Buy a home with bad credit – Fix errors on your credit report
If you notice any errors on your credit report you can dispute them with the three major credit bureaus. You can dispute just about any item on your credit report, from old street addresses to account information. You want to make sure your entire report is accurate without any mistakes. Do this, and it may be much more plausible to buy a house with bad credit. Because the score may not be as bad anymore.
Buy a home with bad credit – Find low credit mortgage lenders
The term “bad credit home loan” is synonymous with FHA loans. FHA home loans are offered by FHA approved lenders. The FHA has low credit score requirements of just a 500 score with 10% down.
However, lenders will each set their own credit requirements. Not all lenders will be able to work with low scores, you should contact multiple lenders to find one that can work with your scores.
So, in conclusion many people have asked the question. “how can I buy a house with bad credit?” well, while its not an easy task, its not impossible.
