You May Have More Options Than You Think
Buying a home rather than renting is a very rewarding lifestyle choice that has been the core of the American Dream for the last one hundred years or more. For those who do own their homes, even with a high level of finance, it is an entirely different experience from paying rent to a landlord every month.
Regardless of that fact, all too many people wrongly assume that homeownership is out of their reach. The downside of the easy credit on which the consumer culture is built is the risk of bad credit that goes with it. It is a trap that is easy to enter and difficult to exit but the good news is that it might not exclude you from homeownership.
You may be pleasantly surprised, possibly even a little bit skeptical, to find that consumers who have less than stellar credit histories still regularly buy first homes for themselves and their families. Before you dismiss this as a joke, here are a few pointers on how that can work.
Get Your Credit House In Order
You have the right, once a year, to receive a free copy of your credit report from all three of the credit agencies, Transunion, Equifax and Experian. The AnnualCreditReport.com website was set up expressly for that purpose. Warning! It is the only official site to provide this service.
Check carefully that each agency has accurate information and be prepared to dispute any errors or inaccuracies with them directly. Beyond that you may have to still do some savings or pay off credit card debt, but if you wish to have better credit you should be doing that anyway.
One of the greatest obstacles to homeownership is the down payment. There is often more than one way around this problem and to get you in the door and in possession of the title to real estate.
Government Financing Makes All The Difference
First there is government financing through the programs of the Federal Housing Administration (FHA), The FHA’s little brother, the Federal Home Loan Mortgage Corporation, AKA Freddie Mac and, for those who have served in the Unites States military, the Veterans Administration has an excellent program.
Possibly you might have a wealthy relative who is willing to provide financing or lend you the down payment. If not, it is not uncommon for sellers who have capital that they wish to put to work to carry finance. This means they will hold a mortgage note or trust deed in return for payments of principle and interest.
Prepare To Pay For The Privilege
In all cases, you will be paying interest on your financing that will reflect your credit history. Quite simply, better credit gets better terms; poorer credit pays higher interest rates. It is the opportunities that come from the FHA and other programs to make a low down payment that gives consumers with poor credit the chance to buy their own homes.
All is not lost if you have poor credit but you may have to do some work to get to where you can buy a home with bad credit. In any case, you should be working to improve your credit with a sense of urgency. With programs that are available and the vast, diverse nature of the American residential real estate market, you are likely to get the home ownership result that you desire, even with some blemishes on your credit record.