While getting approved for a mortgage does require a good credit score, it’s not impossible to buy a house with bad credit. Even if you’re denied by conventional mortgage lenders due to not meeting a minimum credit score, there are options for financing to help you buy your dream home.
Here is a basic guide to some ways you can buy a house with bad credit:
FHA loans are backed by the Federal Housing Administration and have different requirements for qualification than conventional loans. FHA loans are particularly beneficial for first-time home buyers who may have less credit history. There are some special requirements for a FHA loan, however, including only using it to buy a primary residence.
If you’re a veteran or currently serving in the armed forces, you may qualify for a loan from the Department of Veterans Affairs. VA loans have their own requirements, including a special one-time funding fee, but can help you buy a house with a lower credit score. Sometimes they can even let you buy without a down payment.
USDA loans are another type of loan backed by the U.S. government, specifically the Department of Agriculture. If you want to buy a home in a rural area, a USDA loan might be a great option for you, even with a low credit score. USDA loan requirements are less strict than conventional loans, but are only available to fund the purchase of properties in designated areas.
Whether you qualify for a conventional loan or not, it’s never a bad idea to improve your credit score. With some time and effort you can boost your score and become eligible for better interest rates, lower down payments and other benefits from lenders. Make sure to keep these options in mind when considering your next financial steps in buying a home.
Ted draws energy and joy from building synergetic relationships with his Clients. Ted's nature is graciously gregarious and persevering; he's honest; and he's been dedicated to a substantial list of clientele throughout his 25 years in the hospitality business and almost two years as a REALTOR. His passion is creating a sincere, successful relationship with people.
Ted grew up in a family of Realtors in central Indiana, earned a degree in economics and philosophy from the University of Notre Dame, and jumped into all aspects of the restaurant business. His ensuing hospitality career path eventually led him into the Event Management Sales & Service role in hotels and quickly guided him to Los Angeles, San Francisco, and finally to a luxury resort in the Napa Valley, where he, his husband, and their dog have resided for almost a decade now.
The irony is not lost on Ted that his ‘growth’ journey has culminated in“living happily ever after” in an agricultural area with a small-town feel and sense of community strikingly reminiscent of his youth…and as a REALTOR nonetheless!