YOU CAN BUY A HOUSE, EVEN WITH BAD CREDIT

High credit scores make it easier to get financing to buy a house, but low or low credit scores don't mean you can't buy a residence. With bad credit, you will have to do a little more searching and opportunities before beginning the financing and purchasing process.

A crash course in credit

Scores Credit scores, or FICO scores, range from 300 to 850. If you score 740 or above, lenders consider you to be on the top echelon. This means that you have easy access to the best terms and lowest interest rates.

If your credit rating falls below 700, lenders often find a less attractive possibility for loans. This means that you may have a harder time getting financing to buy a home. However, bad credit does not mean that you cannot eventually find help.

Mitigating Factors for Bad Credit

Fortunately, potential lenders don't use your credit score just to determine whether or not they'll offer you a loan. Other factors come into play too:

• Long employment record

• Possibilities of advancement in the current position.

• High income

• Big savings

These specific areas can compensate for low credit scores or weak credit histories. However, there are also specific steps you can take and loans that you can research that can make it easier for you to get financing if you have bad credit.

Big Down Payments

Even if you have a lower credit score, you may be able to win over lenders if you can make a higher down payment on a home. Typical down payments are around 20%. If you can pay 25-30%, you can get a loan. Any loan of this type may have a higher interest rate due to bad credit, but it may still allow you to buy a home.

By making the monthly mortgage payments on time, then you can begin to show that you are a good risk. Also, your credit score will slowly increase. However, this process takes time. You must make regular payments to see the final results.

Low Credit Score

Mortgages some mortgages are designed for those with low credit scores. Depending on how low your score really is, you may qualify for one of these specialty mortgages. However, these types of mortgages generally have higher interest rates than those awarded to home buyers with higher credit scores. This means that you will pay more interest over time, but such mortgages maybe your best option to buy a home now and have the opportunity to start repairing your credit by making payments on time each month.

Federal Housing Administration Loan Programs the Federal Housing

Administration, or FHA, offers loans that can help low-credit home buyers. In general, these federal loans require a minimum score of 580 along with other ratings. If approved, you may be able to make a down payment as low as 3.5 percent.

While FHA loans can help you buy a home, even if you have a lower credit rating, you will pay a little more because these loans include the cost of mortgage insurance. This type of coverage works the same way as other types of insurance. Protects the lender in the event that an owner defaults on a loan. FHA loans are also good options for first-time home buyers.

VA Loans

Veterans with low credit scores looking to buy their first homes may qualify for home loans from the US Department of Veterans Affairs. The USA These loans have full financing with no monthly premiums for mortgage insurance.

Down Payment Assistance

The United States Department of Housing and Urban Development, or HUD, offers grant and assistance programs that can help you make a down payment. Also, your city and county may have down payment assistance programs. Having funds for a size able down payment can make buying a home easier, even if you have bad credit. You will have to meet certain requirements and take a class on homeowner education.

Improving your credit

Score improving your credit score before submitting applications and contracts can make a big difference to your financing options. There are several ways to do this.

• Verify and dispute incorrect information in your credit history and in your report.

• Pay your credit card balances below 10%.

• Do not request any other credit.

Eliminating collections and avoiding late payments is another good way to increase your credit score and increase your financing options when trying to buy a home.

Even if you have bad credit, you can still buy a home. You may have to spend a little more time researching options and completing applications before you can go in and apply for financing, but bad credit doesn't automatically disqualify you from owning a home. There are programs that make buying a home possible and allow you to experience the pride that comes with owning your home.