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:
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.
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.
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.
Experience the difference - personal ties and relationships turn a property into a home. Warm, professional relationships are a hallmark of the Compass experience, and my clients often remark on the quality of my carefully chosen network of financial, legal, logistical and other specialists. The high-quality network that I have fostered extends beyond the Bay Area to an international audience of potential home buyers and sellers through the Leading Real Estate Companies of the World and the firm's luxury home division known as Luxury Portfolio. My personal network combined with Compass market tenure and brand identity gives my clients a distinct advantage when buying or selling a home. My relationships open the door for my clients to be at home anywhere. Where people, homes, opportunity and a bit of imagination intersect, you'll find me at Compass.
