Purchasing a Home With Less-Than-Stellar Credit

by Jennifer Terflinger 10/06/2019

Are you planning to finance a home purchase with bad credit? You are not alone. This article is designed to give you the steps involved to buy a home with less than stellar credit.

You are aware of the fact that any kind of financing can be quite tricky with lousy credit. So whether you are rebuilding your credit score after a financial mishap or you are trying to build it from scratch, financing a home purchase can be quite challenging.

The most common way through which buyers with low credit scores can finance their home purchase is an FHA-insured mortgage loan. These kinds of loans have low down payment options, and they do have minimum credit score requirements. You should have it at the back of your mind that only certain lenders handle FHA loans. Therefore, you may be required to look for lenders that specifically offer such loans. If you are planning on getting your home purchase financed with bad credit, here are some steps to take:

Locate a flexible lender

As mentioned earlier, you need to look for a lender that handles government-insured loans. Apart from the ability to handle FHA loans, such lenders must have a flexible credit requirement. Though FHA loans do have a minimum credit score requirement, lenders may set their standard regarding the down payment and credit score requirements above those minimums. One of the easiest ways to locate a handful of lenders is to make use of an online lending network, which saves you from moving from one place to another to fill out applications. With an online lending network, you are likely to connect with multiple lending partners to find a lender that matches your requirements. 

Boost your credit score as much as possible

Another excellent way to finance your home purchases with poor credit is to increase your credit score. Doing so, in turn, increases your chances of getting a mortgage loan. You should start the process of boosting your credit score a year or two before you consider home financing.

Save towards the closing cost and down payments

A healthy down payment has the potential to help you boost your low credit score when financing your home purchases. Most lenders prefer a minimum 20 percent down payment of the purchase amount. Any amount short of this may require you to pay private mortgage insurance. 

Trying to purchase a home with bad credit does not need to be a stressful endeavor. Visit your financial institution and talk to a financial advisor about viable lending options.

About the Author
Author

Jennifer Terflinger

After 35 years working in the corporate world in the oil and gas industry, I retired to pursue my dream of being self-employed. 

I come from a training and learning environment, helping people to achieve their goals. 

Having obtained my license as a Broker/REALTOR® in July 2015, helping people achieve their dreams of home ownership has been an easy transition.  I closed 18 transactions in my first year with 4 pending closing before the end of 2016.

Your real estate transaction is something I take very seriously. I understand it is all about YOU, your needs and lifestyle, and I am committed to protecting you legally and financially. 

I prefer to spend ample time with you to go through the details so you get where you are going with complete certainty so we can discuss what to expect and how to prepare for the unexpected.

In most endeavors it’s all about the details, and I'm committed to working through them. My commitment to honesty and transparency will provide the impetus you need to make your home ownership dreams a reality.

I am active in my community through my church and I also enjoy reading and of course spending time with my grandchildren.

Why don't you call me to assist with all your home buying or selling needs. You won’t be disappointed!

Here's what some of my most recent clients have said about me.

Jennifer Terflinger is the best! I had not purchased a property in 20 years. She was professional and polite and extremely patient with me. She answered any and all questions with all the knowledge and expertise. Would definately use her again.

Leigh, Wallace, NC

Jennifer Terflinger is a very highly experienced real estate agent. We really enjoyed working with her in finding our new home. My husband and I plan to use her in the future for any other real estate sales or purchases.

Max and Donna