Being a homeowner is a dream that practically every person has. For those who own their own home, it fulfills much more than the basic need of shelter. It provides unparalleled security and stability. However, for anyone with bad credit, being able to buy a house may seem like only a dream.
Credit history and credit scores are amongst the most important factors that are checked carefully before approving a mortgage for potential homeowners. Therefore, anyone who knows his credit is less than ideal often shies away from even trying to buy a house. It is very possible and even likely, however, that those with bad credit can succeed in buying their own home. Below are some of the ways to do so.
Look for and ask about the possibility of owner financing. If the present owner of the home is willing to finance the house and outside funding is not necessary, it is a very good option for those with bad credit.
Provide a sizeable down payment on the home. If you can pay a 20% down payment, you stand a much better chance of being accepted for a mortgage for the remaining amount of the home.
Find the right mortgage broker. Contact a mortgage broker who specializes in finding mortgages for those with bad credit. He may be able to get you approved for a loan when no one else can.
Work on improving your credit score. Today's society is not big on delaying gratification. This may be a great time to start. If you work hard to pay off debt, save money and rebuild your credit, you may have a much better chance of being approved for a mortgage in eight months or a year from now.
Find a co-signer for your mortgage. This needs to be someone with excellent credit that trusts you to do as you say and make the payments on your home. If you default, this person will be responsible for the loan.
Find a rent-to-own house. Especially in today's market, many home owners are willing to make deals and do rent-to-own scenarios. In this situation, all or a portion of your monthly rent goes towards the down payment on the house you live in and pay rent for. You have the option to buy it within a certain period of time. If you do not, you lose the money that you have invested.
Look into a FHA housing loan. Some of these are more tolerant of credit problems than banks and other lending institutions.
As you can see, having poor credit is really not the end of your dreams. Putting the above techniques to work for you will help you get the house you want. If worse comes to worse and you can't get it right away, you can still buy a house later by putting some hard work and some time into your credit situation. Check out your options now and stop paying someone else's mortgage every time you write a rent check.
Jason Kay recommends saving money on a new house by dealing directly with home owners. Search the fastest growing directory of free home listings to find For Sale By Owner property listings. Learn how to buy anything at HowToBuyStuff.org.