People wind up with bad personal credit for a number of reasons. Maybe their business failed, they had to file for bankruptcy, they had few too many loans and bills that were unable to be paid off, or they failed to get their debt consolidated. Whatever the reason, bad credit does not mean it will necessarily be harder or impossible buy your first home. Read on to find out how you can buy a home despite not having a stellar credit report score.
When lending institutions check your credit history and see a low credit score, one of two things will be determined – the bank you are asking for a loan will evaluate the credit risks of giving you a loan and also will determine if your score reflects if you will be approved for the loan, under specific conditions and policies. Since everything is relative to your score, bad credit scores will not only vary from individual to individual, but also slightly change depending on the state of residence.
What you can do to boost your credit scores, you should research some agencies whose job it is to repair your credit scores. Yes, we are suggesting you explore your options using a debt collection agency. Consolidating your debt saves you time, summarizes your debt to make it more manageable, and help you manage your financial affairs before you take on more debt in home loans and mortgage bills.
There are even bad credit home buying programs out there, which is another great option for you to explore. The best sources available are right on the internet. The United States Department of Housing and Urban Development (HUD) helps regulate loans against the default, which protects the lending agency against the risk of non-payment of mortgage bills. This increases the chances for homebuyers with bad credit to own their own home, since there is less risk involved for banks to loan out money. Another similar program is specifically designed for bad credit home buying, also from UHD. This program actually insures loans for families who fall short of the standard credit risk requirements, and are geared towards low income home buyers. This makes it possible for homes to be purchased for as little as only three percent down, and no closing costs, which are included in the mortgage costs.
Some states also offer a local home buying assistance for those with bad credit. The listings may be found online, at your local office housing and community telephone book. Your county office may also direct you towards the right government agencies that will assist you further.
Checking your credit score reportis such an important step to take before you look into any home buying programs. You want to make sure you take all the measures you can take to improve your credit score,and then look for help if you need debt counseling. There are so many options out there for you, so rest assured, your dream of owning your home is well within your reach.