Your credit score matters to mortgage lenders, but that doesn’t mean it’s impossible to buy a house with bad credit. In addition to other loan options, there are other strategies for buying a home if your credit report is less than ideal.
Here are some of the ways you can work toward buying a house with bad credit:
As an alternative to a conventional loan, the U.S. government offers various loan options for qualified borrowers wanting to buy a home. The three most recommended are FHA loans, USDA loans and VA loans.
Private loans are arranged between the borrower and a private individual lender rather than a mortgage company. Private mortgages typically exist between family members, friends or other personal connections. However, it’s not impossible to find a private mortgage lender on your own.
These types of loans can be much more forgiving when it comes to credit report, but might have other requirements per the individual lender.
While not always likely, it is possible to buy a house with cash rather than borrow money at all. Otherwise, another strategy for homebuyers with low credit scores is to supplement a mortgage with a cash payment.
For example, if a lender offers you a mortgage with a higher interest rate or higher down payment because of your credit, you can use cash to lighten the financial burden.
These options won’t work for every buyer, but they’re worth considering if you want to buy a house with a low credit score. Keep these strategies in mind when evaluating your financial situation and shopping for a loan.
Hi, I'm CHERYL COOK and I'd love to assist you. Whether you're looking for advice and guidance to prepare your property for sale or in the research phase of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.
I am a dedicated full-time Broker Associate with eXp Realty. I obtained my New Jersey Real Estate License in 2003 and mentored under seasoned Real Estate professionals who taught and inspired me with their experiences. As a member of the National, State, and North Central Jersey Association of REALTORS® I have achieved the Accredited Buyer’s Representative (ABR®), and Certified Residential Specialist (CRS) designations as well as Short Sale and Foreclosure Resource (SFR®) certification. I specialize in residential sales in Somerset, Union, Middlesex and Essex Counties.
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