How to Purchase a House with Bad Credit
Getting a home loan normally requires a good credit history. Your three-digit credit score helps lenders determine whether you're a good candidate for a mortgage. Because lenders have tightened the belt, getting a home loan with a low credit score can prove challenging. Even so, there are programs available to help people with sub-prime credit obtain an approval.
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Instructions
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Schedule a face-to-face meeting with a loan officer. You can apply for a mortgage online. However, if bad credit resulted from an unforeseen situation such as loss of employment or illness, speaking with a loan officer and providing a good explanation for your low credit score can help you qualify for a mortgage.
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Ask about down payments. Putting money down on a property also helps you acquire a mortgage with bad credit. Loans vary, as do the minimum down-payment requirement. The higher your down payment, the better. Plan for at least a 10 percent down payment.
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Organize your financial documents. Sufficient income can compensate for a bad credit history. Have your documents in order and make copies of your tax returns, paycheck stubs and bank statements.
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Research your options. Work with a broker to learn your options. For example, mortgage loans issued by the Federal Housing Administration (FHA) are available to sub-prime borrowers.
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Ask for help from a family member. Have someone with good credit co-sign the mortgage loan and your lender will take the person's credit history into account when approving the loan and issuing an interest rate.
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