Can you buy a house if you have bad credit history? The answer is, yes. It is possible to buy a house or get a home loan despite bad credit. Nevertheless, consumers are strongly advice to work on credit improvement first before taking the next big step.
house is a huge investment so before signing up for mortgage, it is very
important to carefully weigh the situation and consider the pros and
cons of your decision. It is interesting to note that mortgage lenders
offer the best deals to customers with good credit history or excellent
On the contrary, consumers with unimpressive credit
scores may have limited options when it comes to choosing mortgage loan
deals. If you can wait for another year before purchasing a home, then
you will be in a much better position to apply for mortgage once your
credit score has improved.
How to Buy a Home with Bad Credit
you decide that you want to buy a home today, what are the steps that
you can do? For instance, you may have been discharged from bankruptcy a
few years ago and so far your credit score has significantly improved.
If you feel that you are ready to take on a mortgage loan, consider the
Check your credit report. See
to it that your credit report contains no error or inaccurate
information which could be pulling down your score. If you have been
discharged from bankruptcy 7 years ago, request the credit bureau to
delete the record of bankruptcy and any other negative information from
your report. If you are on your way to good credit, consider waiting a
few more months before applying for a loan.
Evaluate your finances.
It is very important to make sure that you will be able to keep up
with your monthly loan payments from the start until the end of your
loan's term. Is your monthly salary sufficient to cover for your
expenses and mortgage loan payments? Are you certain that your
employment status is stable at least within the next five years? Keep
in mind that if failing to keep up with your mortgage payments would
mean losing the home to your lender.
Find the right lender.
Finding the right lending company is another challenge. Take note
that not all subprime loan offers in the market are legitimate and fair.
You may come across predatory lenders who may take advantage of your
bad credit score by charging excessive interest rates and unreasonable
terms. To find a good lender, you need to spend time doing research and
Choose a reasonable loan package.
How much do you plan to borrow? It is very important to get
pre-approved first before searching for houses on sale so you do not
waste time considering homes that are out of your budget.
It is very important to have a definite repayment plan to make sure
that you can stay true to your payment obligations. It's a good idea to
consult a trusted credit counselor who can help you create a doable
repayment plan that fits your situation.