If you are considering buying a house with bad credit, there are a few things you should know first.
Bad credit can cause a lot of problems with you apply for a mortgage. Traditional lenders will be highly unlikely to give you a loan if you have poor credit history.
However, there are some lenders that will give you a bad credit loan. These lenders are called bad credit lenders. They specialize in something called subprime mortgages.
A subprime mortgage is basically a mortgage that is given to people with poor credit in return for very high interest payments. On the surface, a subprime mortgage may seem to bewellsubprime, but it can actually be a very good loan for people who can't get a conventional loan due to credit problems.
A subprime loan will generally have interest rates between 2% to 10% over conventional interest rates. The interest rate will, of course, vary depending on your subprime mortgage. The lower your credit rating, the higher you can expect to pay in interest rates.
Now, if you happen to have a down payment, you can get a subprime loan with conventional rates - but you will need a substantial down payment to do this. By putting a down payment down on a home, you not only save yourself extra interest, but you save yourself a lot of money over the long term because the loan short duration, which means less overall interest is paid.
The best place to find subprime mortgage loans is online. There are many bad credit lenders looking for your business. You should spend a good amount of time visiting various subprime mortgage lender websites to see what loan rates and terms they offer. There is a HUGE variety of interest rates and loan terms from bad credit lender to lender. One lender may have the cheapest interest rate for a specific credit score tier, while another lender may have a more expensive interest rate for that credit bracket, but a cheaper rate for a different bracket. So, you should do some serious comparison shopping to ensure you get the absolute best bad credit loan deal you can find.
If you don't want to go through an online subprime lender, you can always approach a conventional lender for a loan. However, your chances of getting said loan will be very slim unless you can cough up either a significant down payment on the home or you have some substantial collateral to get a secured mortgage for people with bad credit.
There are a couple less well-known options for buying a
house with bad credit that you can also consider. One option is the VA Home
loan program. This is a special loan that only people who have served in the US
Military can qualify for. Not only does the loan have very loose requirements,
it's also given to people with bad credit. The second option is to look at some
sort of owner financing deal. Owner financing is where instead of getting a
loan from the bank and then paying the owner of the house, you directly pay the
owner monthly installments. Essentially, the owner becomes the "bank" which you
make the mortgage payments to. This is a great way to get a home with bad
credit. These are some of the less well-known ways for how to buy a home with bad credit history.
It's very much possible to go about buying a house with bad credit. The loan terms you get many not be the best, but you can use a bad credit loan to build up your credit for a couple years, and then apply for a better loan.