Buying a home is a major commitment. It is much easier to qualify for a home loan if you have good credit, but it is not impossible to qualify if your credit is not what you want it to be.
1. Make sure your finances are strong enough to support your loan payment and all of your other bills.
Make sure you can support the weight of adding a large payment to your monthly bills before adding this to your load. If you have a hard time covering your bills each month, you may want to wait until you have more financial freedom before jumping into any kind of mortgage.
2. Try to save more than 10% down for closing.
It may seem like a huge undertaking to save enough to put 10% down on a house plus closing costs, but saving more than 10% is a good idea if you have a low credit score will lower the amount you have to borrow to buy a home. This will make it much easier to qualify for a home loan.
3. Try to find a co-signer
This may seem like a lot to ask of friends and family, but if you can find someone to go in on the house with you as a co-signer who has a higher credit score, it can be very helpful to qualify without having a higher interest rate or mortgage insurance payment.
4. Try an FHA Loan
If you can save 10% or more to put down at closing, you may want to consider an FHA loan because they allow a lower credit score to qualify for this loan. You have to calculate the payment with the mortgage insurance payment you will have, but it is a good option to consider if you want to get into a mortgage before you fix your credit.
6. Clean up your credit before you apply
– If you want to buy a house and you are not in a rush to get it immediately, you may want to wait until you fix your credit before applying for your mortgage loan.
– To clean up your credit you have a few options to think about, such as:
– Pay more than the minimum on your credit cards to pay down the principal amount and interest with each payment.
– Do a balance transfer to consolidate your payments and qualify for a lower interest rate.
– If you have debt in collections, you can negotiate the pay off amount and set up a reasonable monthly payment to settle the accounts. If you don’t feel comfortable negotiating for yourself, you can call a company to negotiate for you. Just keep in mind this option is only for debt that is already in collections.