Not everyone has perfect credit. Having less than stellar credit does not mean that you should not have the privilege of becoming a homeowner. Although credit scoring is an important factor in obtaining a mortgage loan, it is not impossible to get the financing you need for the Jacksonville property you desire. This is true even if your credit score is not as high as you would like it to be. Below are a few tips for home buyers with bad credit.
Tip # 1 – Get an FHA Loan
FHA mortgage loans are a good way for people with blemishes on their credit report to get the financing they need to purchase a home. While a minimum credit score is occasionally imposed, it is typically much lower than it would need to be for a conventional loan. As long as you have a good explanation for the bad credit history, FHA lenders will usually still work with you. Alternate forms of credit may be used to determine your credit worthiness such as your utility bills and rent payments.
Tip # 2 – High Interest Loans
Although in the beginning you may pay higher monthly payments for a high interest loan, it may be a good option to get you into a home and to begin the process of rebuilding your credit. After you have made your monthly payments on time for about two years, you can refinance your mortgage and get a lower interest rate. If you agree to pay the higher interest rate in the beginning, several lenders may still offer you a mortgage loan.
Tip # 3 – Get a Co-Signer
If you do not have good credit and you really believe you can not obtain financing on your own, seek the help of a co-signer such as a parent or other relative who does have good credit. Many lenders will extend a mortgage loan with such an arrangement as long as the co-signer is willing to accept responsibility for the payments in the event that the buyer does default on the loan. If you have good intentions and a steady income, getting a co-signer may be the right choice to purchase your new home.
Date: 2008-09-22 13:04:00