If you want to buy your own home but have some credit issues, then you will want to read this article. I will show you exactly how you can buy a home, even with bad credit. By the time you are done reading this article you will know three of the most widely used methods for buying a home with bad credit.
Bad Credit Loans
If you have bad credit and are looking for a home mortgage loan, you’ll want to find a lender that specializes in bad credit or sub-prime mortgages. Even though you may have bad credit, you still may be eligible for up to 100% financing on your home. If the lender can verify your income, and sees that you make a reasonable amount of money, then buying a house with bad credit is possible for you. Even though most bad credit loans are at a higher interest rate, they can get you into a home of your own.
Two choices that are available to you, in the way of mortgage loans, include bad credit secured loans and bad credit unsecured loans. Bad credit unsecured loans can be found at comparatively lower interest rates and these loans do not require collateral. The other choice, Bad credit secured loans are called this because they require the borrower to pledge some kind of collateral or security to cover any risks to the lender.
Rent to Own or Lease Purchase Option
A lot of times you can find homes with these options, the only drawback is that usually the rent on these homes is well over $1000 a month. If you can afford that, fine, but if you have a limited budget then this amount is usually out of the question. If you can find a house that is a little bit cheaper, meaning the asking price of the property is below average to average, and you can get the house rent to own, then your rent will be a lot less.
Some investors will sell properties with a rent or lease option for a period of 1 or 2 years, while you re-establish your credit, and then at the end of that time you will need to get your own financing. One such company is National Home Buyers Assistance. Most of these investors will rent or lease to you for a period of at least one year. At the end of that year you will have the option to purchase the property for the price determined when you signed the rental or lease agreement, or to extend the contract if you need more time.
This is a great option for anyone who cannot get traditional financing due to credit issues or not having a down payment. It is also a great way for self-employed individuals, under-employed households, and those with a possible job change or relocation needs, to get into a house of their own. If you need to sell a former home before moving into the next one, or you just need to get a better feel for the neighborhood before making a permanent decision, this option is also a great alternative for you.
Contract for Deed
Finding a contract for deed is not always easy and will require some work on your part, but if you are willing to put forth the effort than it can really pay off in the long run. When looking for a contract for deed home, remember to check the listings in your local newspaper or online. A lot of times you can deal with these people and often can work out a contract that benefits both of you. You can get payments set up for an amount that you can afford, and sometimes can work out an option of paying an interest only payment for a period of time. This would allow you time and the extra money you need to upgrade your home, or to re-establish your credit.
