How to Buy a Home With Less-Than-Perfect Credit
If everybody with less than perfect credit were excluded from buying a home, there would be a very large shortage of homeless shelters. The fact is that even with less- than-perfect credit you can still purchase a home. Our recommended lenders can help you. Here are a few pointers as well:
- Be honest with the lender. During the prequalification period, don't lie and don't make excuses. Give reasons if applicable such as a debilitating illness or unexpected unemployment.
- Try to find a cosignatory. The cosignatory is someone who will make the payments if you default on the mortgage. Parents, siblings, grandparents, and close friends are usually willing to help you achieve your home-ownership dreams.
- Locate lenders who specialize in credit problem loans. Our recommended lenders can help.
- If possible, try to find a property that the seller is willing to finance or partially finance. Seller financing is a way to avoid the stringent guidelines that most lending institutions have in their underwriting processes.
- Save as much money as you can to make as large of a down payment as possible. Work on improving your credit and periodically check to see if your efforts are paying off. (check your credit now)
Having less than perfect credit does not permanently bar you from owning a home. Most will welcome you with open arms and help you find the program that is right for you.