Buying A House with Bad Credit

Buying a house is a true dream that you have and your bad credit is not helping you.If you are the one who is struggling in buying a house with bad credit,this article is for you.Here you can explore different options available for you to fulfill your dream.

You may be well aware that credit score is a three digit number which measures your credit worthiness.It is used by the lenders as one of the important factor in taking a decision about approving your mortgage or home loan.

When your payment history is bad or when you had missed few monthly bills on time,it will be reflected in your credit report.This will do enough damage for you and this black marks remain in your credit history for a long time.Every lenders who wish to approve your loan application first go through your credit report.He will approve your loan request only when he feel safe about his money.In many cases your application is even taken care by a computer and when you are having bad report,it will automatically reject your application.

Here you can not stop the lender and he will fetch the financial data from a credit reporting agency.The best way is disclose your credit score problems to the lender with your loan application.You can attach a written letter about the reasons for bad credit.You may have a genuine reason like loss of job or a serious health issue which led you into financial mess.You can explain all this to the lenders and wait for the result.

You can ask your loan officer about the problems in approving the loan.Let us know what has to be corrected to get the approval.Rather waiting for the decision,you can start correcting the problems that you have.

There are certain lenders who wish to give you a loan to the people with bad credit.This will help in buying a new home with bad credit.But you shall understand that,you need to pay extra interest than a regular mortgage or a home loan.This is the price you have to pay for your past behavior and the choice that you have is limited.

When it turns difficult for you to find some of this kind of lenders,you can look for mortgage brokers.As they are the people who used to be in touch with different lenders, they know the lenders who can approve easily.They will guide you by understanding your credit report and its problems properly.

You can find some sellers financing.The rules for this people are not that much rigid.They want tax advantage and high rates of return.When your present credit behavior is good,they do not bother a lot about your past history and they may approve your loan application.

You can try getting a co-borrower to get a better result.This time both of your credit scores come into play for consideration.If the other person is having a better score,you may get advantage and easy approval.



Picture source : http://www.flickr.com/photos/executionsinfo/3773636315/)

If all this things fail,you may need to take a pause.You can hold yourself from buying a home and loosing too much of money in the name of extra interest rate.You can just wait for two years to fulfil your dream.You may save some money in this time for a better down payment and keep your good credit history to improve your credit score.It is sure that soon a lender could be knocking your door to give a loving loan with lower interest rate.

All the Best.

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