A poor score should not hinder anyone from acquiring their first home because buying a home with bad credit is possible. Just because your last home was foreclosed or you had to file bankruptcy in the past does not mean that you cannot own a home. There are many lenders who are willing to help you acquire the desired property.
You should know that, as like other bad credit catalogues you have to pay more for the loan. All you have to do is find the right lender and discuss the options available to you. It is important to note that you have several options.
If you had filed bankruptcy, you can qualify to get attractive rates on a conforming loan after only four years. On the other hand, if you went through a foreclosure, you can get help from the FHA after only two years, with as little as 3.5 down. However, you must have had a regular income throughout the period.
After the prescribed period has lapsed and you meet all the qualifications, the first option you have is to get loan insurance from the FHA. By doing this the FHA will assume your risk in case you default. This will make it easy for lenders to finance your acquisition of a new home. Millions of people have benefited from this insurance scheme since its establishment in 1937.
Contract of Deed
Another option is to find a trusted friend or a close relative who is selling a house. You can acquire that house through a land contract or a contract of deed. This agreement allows the buyer to own the property while the seller retains the title to the property. After full payment has been made, the title and full ownership rights can be conveyed to the buyer.
While these contracts were nearly phased out by mortgages in the 1970s and 1980s, they are becoming increasingly popular, especially after the mortgage crisis that saw many people lose their homes to foreclosure. These deeds are enforceable by law, so if you do not make payments according to the terms outlined in the contract, you can be taken to court and forced to pay.
Buying a home with bad credit is possible; all you need is discipline and determination. While there are other options, like borrowing from hard money lenders, the options mentioned above are by far the least expensive. Other options require huge down payments of up to 30 percent and very high interest rates which will amount to a lot of money over time. Get your FICO score today and start working on your credit, so that you can qualify for better financing options.
You should know that, as like other bad credit catalogues you have to pay more for the loan. All you have to do is find the right lender and discuss the options available to you. It is important to note that you have several options.
If you had filed bankruptcy, you can qualify to get attractive rates on a conforming loan after only four years. On the other hand, if you went through a foreclosure, you can get help from the FHA after only two years, with as little as 3.5 down. However, you must have had a regular income throughout the period.
After the prescribed period has lapsed and you meet all the qualifications, the first option you have is to get loan insurance from the FHA. By doing this the FHA will assume your risk in case you default. This will make it easy for lenders to finance your acquisition of a new home. Millions of people have benefited from this insurance scheme since its establishment in 1937.
Contract of Deed
Another option is to find a trusted friend or a close relative who is selling a house. You can acquire that house through a land contract or a contract of deed. This agreement allows the buyer to own the property while the seller retains the title to the property. After full payment has been made, the title and full ownership rights can be conveyed to the buyer.
While these contracts were nearly phased out by mortgages in the 1970s and 1980s, they are becoming increasingly popular, especially after the mortgage crisis that saw many people lose their homes to foreclosure. These deeds are enforceable by law, so if you do not make payments according to the terms outlined in the contract, you can be taken to court and forced to pay.
Buying a home with bad credit is possible; all you need is discipline and determination. While there are other options, like borrowing from hard money lenders, the options mentioned above are by far the least expensive. Other options require huge down payments of up to 30 percent and very high interest rates which will amount to a lot of money over time. Get your FICO score today and start working on your credit, so that you can qualify for better financing options.