3 Tips For Buying A Home With Bad Credit

Real Estate Blog

Buying a home is a major financial decision for most people. Often people try to wait until they have built up solid credit and are financially stable before purchasing. However, sometimes credit can be impacted by things that are out of a person's control. For those who have less than stellar credit, it can be difficult to buy a home, but it is still possible. There are a few things that potential homeowners with lower credit scores can do in order to find the right home. Here are three tips to buy a home with bad credit.

Get A Mortgage Pre-Approval

The first thing that anyone who is looking to purchase a home should do is to make sure that they are able to get financing. This is especially important for those who have low credit scores. A mortgage pre-approval is a great option for home buyers with low credit scores. A pre-approval from a lender will give buyers a solid estimate of what they can afford and how much financing they will be able to get. Pre-approvals take on average 1 to 2 weeks, but it can take longer if the mortgage seeker's financial situation is complicated.

Look At All Of The Financing Options

Those who have bad credit should also consider looking at different ways of financing a home. FHA loans are available for buyers with credit scores as low as 580 with a minimum down payment of 3.5 percent. Saving more for a down payment and working to repair credit scores can also make it easier for those with bad or poor credit to purchase homes. For those with bad credit scores but with plenty of liquid cash on hand, purchasing a home with an all cash offer is another alternative to consider.

Hire A Real Estate Agent

Hiring an experienced real estate agent can also be very beneficial for those who do not have good credit. Poor credit often means having to stick to a strict budget when searching for a home. An experienced real estate agent can find properties that fit both the budget and the needs of the buyer. They are also able to offer insight on homes that may end up being a money pit and can prevent buyers from purchasing homes that may lead to financial problems in the future.

Purchasing a home with poor or bad credit may seem like a daunting task. However, it is possible. A few things that help include getting a mortgage pre-approval, looking at various financing options, and hiring an experienced real estate agent.

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