Can you buy a home if your credit is bad?
Bad credit can create lots of negative effects on your life. It will even keep you away from getting a home loan. However, this doesn’t mean that you are kept away from owning the home that you always wanted to secure under your name.
Here are some of the most effective methods available for you to buy a home even with bad credit.
- Go for an FHA loan
FHA or the Federal Housing Administration doesn’t pay too much attention to your credit score when approving loans. Even if you have a credit score under 600, you will be able to get this loan approved. Therefore, you need to think about applying for an FHA loan.
- Get a co-signer
Getting a co-signer will also be able to help you with buying a home with bad credit. The co-signer that you get should be a person who can trust you. That’s because the co-signer knows that he is responsible for you to make payments in a timely manner. If you go ahead with a foreclosure, your co-signer will have to face a variety of negative consequences.
- Make a large down payment
If you can make a large down payment, you will be able to get the mortgage loan approved, even if you have bad credit. In fact, you will need to think about making at least a 20% down payment of the sale price. Your lender will take a look at the down payment amount you have made and proceed with approving the loan to obtain a home. You can also think about borrowing money from your friends or family members so that you can go ahead with such a large down payment.
Consider these options and proceed to buy your home. This will help you to keep bad credit away from securing your dream home.