Should I even think about a house if I have bad credit?

Mortgages

People with less than perfect credit should ask themselves the same questions when considering home ownership that people with good credit ask. If you think you are ready for homeownership, ask yourself if you are ready to take responsibility for a house. If the answer is yes, then you can begin to think about home ownership regardless of your credit rating. People with good credit can usually qualify for a mortgage immediately, but if your credit is less than stellar, you may need to take some additional steps to prepare. The process will not be as quick, or as easy, but you can do it!

Why haven’t I heard this before? There must be a catch!

There are some ‘catches’, or difficulties, if you apply for a mortgage with poor credit. No matter how you look at it, if you have poor or bad credit, your mortgage is going to cost you more than a mortgage will cost someone with good credit. It will take you longer to find a lender, you will pay more for the mortgage, and they will probably want a larger down payment. Finally, most mortgage lenders will require you to pay off some of the negative accounts on your credit report, in order to approve a mortgage. Finally, the lender may not approve a mortgage as large as one that would be approved for a good-credit candidate.

Get Started on Owning Your Home.

The first step is to order a credit report. By law, you can get obtain one a year for free from each of the three major agencies (Equifax, Experian, and Trans Union). You will want to have one so that there are no surprises once you apply for a mortgage. Once you have the credit report, make a list of exactly what the report says you owe, who you owe it to, and how much it is. Armed with this list, you will not be shocked when you talk to the loan officer.

You will also want to make sure you have copies of your tax records, including the W-2s. Include copies of your bank records to show your patterns of saving and spending. Keep all of these items together in one place, so that the application process will be easier. Next, plan on selecting a real estate agent. A good agent can recommend different mortgage companies for you to contact.

Expect the mortgage company to make a number of suggestions on how you can improve your credit standing in order to qualify for a loan. If you get rejected the first time, work on cutting down your debt and improving your credit, and try again! It may take a few tries. There may also be special mortgage programs available for different areas, such as inner city renovations or rural subsidies. The key is to be flexible. You may have to think outside the box if your credit is poor, but you can own your own home! Consider buying Jacksonville FL real estate.

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