Tips for Getting a Home Loan Even With Bad Credit

List: Posted: 12/10/10

If you have bad credit, you might think that there’s no way you could buy a home. That’s not the case, though! There are many ways to compensate for your credit so that you can afford a home and all the stability and happiness that it brings.

One way to buy a home with bad credit is to save up a bigger down payment. If you can put more than 20% of the purchase price down, banks will often overlook somewhat bad credit. If your credit is awful, you’ll have to do more than this, though.

Another option is to purchase less home than you can technically afford. A bank will not want your total debt payments to exceed 45% of your monthly income, and this ratio may be more important than bad credit. If you buy a cheaper home so that your payments are more like 20% of your total monthly income, the bank will look more favorably on your bad credit.

You can also use special financing programs for people with bad credit or little credit history. One option is to go with an FHA loan. This is basically a loan backed by the Federal Housing Administration. The FHA guarantees that they’ll pay your loan if you default – or stop paying it. This makes you less of a risk for banks, and you can get a home loan with bad credit this way.

Of course, there are often ways to fix your credit by a few points very quickly. Bad credit might be the result of mistakes on your credit report. You can also pay off credit card debt to help get your credit score up.

Credit Unions

    Navy Federal Credit Union is the world’s largest credit union and proudly serves members of the military, DoD, and their families providing solutions in banking and other financial needs worldwide. Learn more about our services such as auto loans, mortgage lending, and top rated credit cards. Join today!

    • 44315 Ice Rink Plz
    • Ashburn, VA 20147
    • (888) 842-6328

      Buying, refinancing — whatever you need. You can count on the nation's leading residential lender to be right there with you, guiding you through the process. Whether you're just starting to explore your options or you're ready to make a move, talk to us. We'll give you the information you need and help you understand your home loan options. Please call to make an appointment. NMLSR ID 399801 Equal Housing Lender.

      • 20370 Exchange St Suite 230 Ste 230
      • Ashburn, VA 20147
      • (571) 223-3306

        basement renovation, kitchen remodelling, deck patio, drywall and painting, home edition, home extension, sun room, high tech lighting design.

        • 41189 Hamilton Chapel Ter
        • Ashburn, VA 20148
        • (703) 297-1216

          Regional Home Mortgage Lender serving Virginia and Maryland. New homes, Re-finance - specialists in Senior Lifestyle Mortgages (Reverse Mortgage)

          • 44121 Harry Byrd Highway Ste 250
          • Ashburn, VA 20147
          • (571) 291-4913

          The material in this article is for informational purposes only. The views expressed in this article are those of the author and do not necessarily reflect the views or opinions of Local.com. See Additional Information

          More about local.com Features

          Socialize With Us
          Business Top Searches
          Recently Added Coupons

          Copyright 2017 Local.com Ltd - US Patent 7,231,405 - Privacy Policy - Terms of Service
          Advertise with Us - Claim Your Business Listing - Contact Us - FAQ - Site Map - Some data provided by Acxiom.