If you’ve had your heart set on purchasing a house, but bad credit is holding you back, it may be time to start searching for your dream home again. That’s because, even though a good credit score can allow you to obtain a lower interest rate on a mortgage, having bad credit won’t necessarily prevent you from buying a home.
Credit scores typically range from a low of 300 to a high of 850. For those who have scores of 740 or higher, the best (aka lowest) mortgage rates can typically be secured. But if you have a credit score that is considered low, there can still be other options available to you.
One alternative is a low credit score mortgage. As the name implies, this type of loan may be available to those who have credit scores that fall into the lower ranges. In this case, you will likely have a higher interest rate on the loan, in turn, causing you to pay more money overall for the property. But with interest rates today still hovering at historical record lows, it can still make sense to purchase now (or in the near future) so that you can build equity in the property over time.
Another option is to make a higher down payment. Buyers who put down at least 20% are oftentimes considered less risky to mortgage lenders. With that in mind, you could consider putting 25%, 30% or more down, and in turn, reducing the amount that you have to borrow.
If you plan to make a move soon, we can help. Having the guidance of an experienced real estate professional can allow you to breathe easier, knowing that all of the pieces will fall into place.
We can provide you with information about available homes that closely match your ideal criteria – and if you find one that you just can’t live without, we’ll assist you through the offer and negotiation process, too.
Want more information on strategies for purchasing a home – even if you have bad credit? Just contact us today for details.