How to Buy a Home with Low Credit?

Credit scores

Don’t give up on owning a home just because you have a low credit score!

For the millions of Americans without perfect credit, buying your own home may seem like just a fantasy. But did you know there is still a chance at owning your own home with a bad credit score? Before we delve into that, let’s take a look at what makes up a credit score and what a good credit level is!

A Look at Your Credit

Credit scores range from a low of 300 to a high of 900. The higher your score is, the better it is. These scores are determined by late payments, non-payments, current debt, types of credit accounts, history length, inquiries on the report, history of applying for credit, and bad behavior like writing a bad check. These scores are not set for life. There are several ways for you to improve bad credit scores. The first method is the pay your bills on time. Delinquent bills affect your credit tremendously. You should also keep a low balance on your credit cards. Do not open new credit cards unless necessary. If you close any accounts, make sure they are in good standing as it takes a while for accounts to disappear from your reports.

How to Get a Mortgage with Low Credit?

While most lenders requirements vary from lender to lender, when you have bad credit it can be hard to get a conventional mortgage. So why not choose something a little less conventional? While many people advise pairing a large down payment with a low credit score, this is not always something families are able to do. So instead of going to a conventional source for a loan, try loans from the Federal Housing Administration (FHA), Veterans Affair (VA), and U.S. Department of Agriculture loans. These administrations you do not need to have a high credit score. Another way of owning your own home is the work with a homeownership counselor. There are many local and national nonprofits that offer this type of counseling for future homebuyers who need to raise their credit score or navigate the homebuying process. This method does take some time to help you achieve your goal, but it is worth the wait. These counseling sessions will help you learn how to take steps to raise your credit and help you apply for a home loan when the time is right.

When applying for a mortgage, it is important to monitor your credit score for errors. A low credit score does not mean you won’t have your dream home. It will just take a little time and a search into unconventional mortgages. For more information on finding your dream home, call Simply Referable!

Buying a Home with Simply Referable

The small team of realtors at Simply Referable is deeply focused on creating a memorable selling experience for you and your family. Each of our team members has an area of expertise, and we strive to form lasting bonds with each of our clients. We want to be your go-to realtors every time you or a friend wants to make a change. With local experience, our realtors can help you choose a house that is just the right fit for your family, now and forever. Contact us online or give us a call at 410-983-9045.