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Tips To Buy A Home With Bad Credit  


Your credit score could take a huge hit if you start to fall behind on your bills. While people have their reasons for falling behind, perhaps unemployment, medical issues, etc., the credit industry doesn’t really care. Your credit score will fall if you do not make your payments on time, and especially if you do not make them at all. Even if you have fallen behind but are now back on track, it might take a while for you to be able to get an improved credit score, making it hard to get a conventional mortgage. If you really feel that you are ready to purchase a home or do a mortgage refinance, but you have poor credit for one reason or another, there is something called a bad credit mortgage that you can get. Now that you know you could possibly apply for this type of mortgage, it is important also to know that the lender will not solely take your credit score into account if you are applying for this loan or for mortgage refinancing. The overall financial situation that you are in will be included in his assessment, along with your credit score. There are some tips you can follow that will help you get into a home even if you have poor credit. 


One very important tip to pay heed to is to spend less than you make. Save the money that you are not spending so that you will have the money for a down payment, and also have something in the bank so the lender will see that you are capable of saving money for a certain amount of time. It might sound like silly advice, but it is so important if you want to purchase a home. An FHA loan requires perhaps the lowest down payment, and even with that, you will need to have the down payment and a reserve in hand for a couple of months, so that you will be able to cover closing costs. 


Another tip that you should know is not to quit your job and get a new one right before you apply for the loan. If you know that you will be changing jobs soon, try to purchase a home before the job change, or else the lender might deny your request and have you wait another two years so that you have a stable history of work. 


You maybe should talk to a loan officer before you talk to a realtor so that they can let you know how much you will be able to afford. Applying for a loan with poor credit will probably mean that you will have some higher requirements, but if you are honest with the loan officer, he will let you know what type of loan you could qualify for and help you qualify for a low down payment.