Ways You Can Buy a House With A Bad Credit Score

Buying a home is integral to the “American Dream,” but it is increasingly out of reach for many hard-working adults.

The property market has been highly competitive over the last year because housing supply has shrunk dramatically.

While most of the older generations will have their own homes through retirement, less than half of the largest group in the workforce – Millennials – think they’ll have that same luxury.

A traditional mortgage is usually a fixed-rate loan, so the interest rate never changes. Although this is the kind of loan people typically think of, it’s only ideal for people with a credit score above 620.

Mortgage Options

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Step-by-Step Guide for Buying a Home With Low Credit

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Enroll in a Homebuyers Workshop

If you can get into a course locally, it should be free. You can also do it online at your own pace. However, there will probably be a charge for this.

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Once the course is complete, you’ll get a certificate you can use when you apply for financing. The HUD counselor should be able to help you with this.

Mortgage Options

As mentioned earlier, Federal Housing Administration (FHA) loans are the best option for someone with poor credit. The loan won’t come directly from the FHA but through an approved, private lender.

Look For Fha Loans

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Your local HUD office should be able to find the best option in your area. Make sure you have enough funds to cover the down payment and the mortgage insurance fee.

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Like any other mortgage, you can get pre-approved for an FHA loan. Pre-approval can help you save time and narrow your search as you look for a home.

Try To Get Pre-approved

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