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Coldwell Banker Realty
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Want to buy a house with bad credit? Here are some options to consider

by Barry Bates 08/14/2024

Your credit score matters to mortgage lenders, but that doesn’t mean it’s impossible to buy a house with bad credit. In addition to other loan options, there are other strategies for buying a home if your credit report is less than ideal.

Here are some of the ways you can work toward buying a house with bad credit:

Government subsidized loans

As an alternative to a conventional loan, the U.S. government offers various loan options for qualified borrowers wanting to buy a home. The three most recommended are FHA loans, USDA loans and VA loans.

  • FHA loans are offered by the Federal Housing Administration. An FHA loan is great for first-time homebuyers because of lower minimum credit score requirements and lower down payments.
  • USDA loans are paid for by the U.S. Department of Agriculture. This type of loan can help you buy a house or property in a qualified rural area.
  • VA loans are available from the Department of Veterans Affairs for active military personnel and veterans. These loans typically have a special one-time funding fee instead of a large down payment.

Private loans

Private loans are arranged between the borrower and a private individual lender rather than a mortgage company. Private mortgages typically exist between family members, friends or other personal connections. However, it’s not impossible to find a private mortgage lender on your own.

These types of loans can be much more forgiving when it comes to credit report, but might have other requirements per the individual lender.

Cash

While not always likely, it is possible to buy a house with cash rather than borrow money at all. Otherwise, another strategy for homebuyers with low credit scores is to supplement a mortgage with a cash payment.

For example, if a lender offers you a mortgage with a higher interest rate or higher down payment because of your credit, you can use cash to lighten the financial burden.

These options won’t work for every buyer, but they’re worth considering if you want to buy a house with a low credit score. Keep these strategies in mind when evaluating your financial situation and shopping for a loan.

About the Author
Author

Barry Bates

I am an experienced Real Estate Professional who has anchored rich relationships within the Greater Cincinnati and Suburban Area Regions. I analyze the market multiple times throughout the day in order to optimize the search criteria of my clients. The knowledge and experience I have attained over the years has led to thousands of lives to being positively impacted through purchasing and selling real estate. My dynamic commitment to the success of others has allowed me to help many individuals and families realize their dreams. Wouldn't you want to be Real Satisfied with the service you receive?

Collaborating with Coldwell Banker West Shell, we possess the technology and other remarkable industry-leading resources to help you connect with the best possible property for you. We have your best interest as our TOP PRIORITY!

My extensive history in Management within Butler, Warren, and Hamilton counties empowers you, my client, to benefit from the richness of the diverse markets and resources that are an integral part of the real estate relationship.

I desire to be in sync with your goals. YOU are my focus. YOU are my business.