Can I get a House with my Bad Credit?

Bad credit does not have to be an impediment to getting a loan and a mortgage, however it can make things much more difficult for you to do so. If you intend to buy a house after an unfortunate mark on your credit such as a foreclosure or bankruptcy, then you will have to have a bit more cash up front than you would if you were trying to finance a house with good credit.

Getting the loan
The first step is to get pre approved for a mortgage loan from a sub prime lender. Check with many different lenders to get the best rates, and don’t be afraid to shop around. Once you have a loan picked out, you can hopefully go home shopping without having to worry about where the actual money for the mortgage is coming from. Be aware that you may need to pay more up front for a sub prime loan, and that your monthly payments will likewise be higher. You may also be required by your lender to pay more in fees at closing. This is because you are considered a high risk, and the lender wants to get their money’s worth out of you.

Shopping around for a house
Looking for a home can be a very exciting experience, but if a real estate agent recognized the lender that has pre approved you as a sub prime lender, they may be more willing to consider slightly lower offers from other potential buyers over your own offers. They might also be concerned about your ability to provide an adequate down payment. For this reason, be sure to make it clear that your offer includes a hefty down payment, and be prepared to put that money where your mouth is. It may take you a lot longer to save enough money to do this, but it is one of the best ways to ensure that you are given fair consideration on your home bidding experience.

After the closing
Your payments may seem like quite the heavy burden, but making them regularly and on time will make your credit increase over time and your credit score will eventually be high enough that you can refinance your home and begin to make some real headway on your loan or save enough cash to collect a real nest egg for troubled times in the future. The dedication to making these payments must be almost religious for you, and you must not let things slip. A little slip can lead to another slip, and eventually you will run the risk of another foreclosure, and you certainly do not want to have to deal with that again.

It is possible to buy a house with bad credit, but the process is much more expensive than it would otherwise be, and is much more difficult than it would be for someone with good or excellent credit. You will face discrimination because of your past, but you can overcome it and buy that house if you try hard enough. It is all up to you.