Real Estate 101 – Buying a Home If You Have Bad Credit
Bad credit no longer precludes you from homeownership. As a matter of fact, a whole lending market has cropped up around the idea of helping future homeowners with less than stellar credit achieve their goals. Here are some steps you can take in order to get ready to buy your home with bad credit!
1. Get a copy of your credit report, and fix what you can. Some bad entries you might be able to have expunged simply by paying the outstanding sums – which may be as low as $20! Don’t let small debts keep you from owning a home.
2. Look for lenders who will work with you and compare their interest rates. You will have to pay a higher interest rate, but different lenders will charge different fees. Shop around!
3. Find a cosigner. Depending on how bad your credit might be, you may need someone with good credit to co-sign on your loan.
4. Show your lender that you mean business. In other words, prove to them that you are now a good credit risk by having a budget, sticking to it, and by being to show that you have paid all your debts on time lately.
5. Once you have found a lender who will write your mortgage, get it in writing and get pre-approved.
6. Go out and shop for a home with your pre-approval in hand. This shows sellers that your loan will not fall through at the last minute, but that you are a serious buyer who will see this transaction through. This may be the difference between having your offer accepted or ignored.
