3 Ways to Buy a House with Bad Credit
If your FICO score is 680 or less, you may have some trouble convincing a bank that is safe for them to loan you money for a house. If that’s the case, don’t despair –It doesn’t necessarily mean that you’re out of luck when it comes to fulfilling your dream of home ownership. It may take just a little bit longer and require a little more work, but here are some ideas that will get you on your way.
1. Obtain a major credit card and work on bettering your credit score. This will take a while, so patience is essential. Make a couple of big purchases a month and then pay them off in full at the end of the month, when the bill comes in. Slowly, this will start showing up in your credit report and encourage lenders to see you as a responsible person. If you give it enough time, it will eventually start to also increase your FICO score.
2. Save up a larger down payment. The more money you are able to put down as a cash payment at the time of signing, the less will be left for financing. Coming up with $20,000 may seem impossible at first, but look into small loans, credit card advances and even the possibility of selling your car or jewelry to amass that amount.
3. Obtain seller financing. Rather than getting a bank to pay for the house, work out an agreement with the seller in which you pay a certain amount per month (as you would if you were renting) towards the price of the house. You will probably still need to come up with a down payment, but it’s still easier than having to save up the whole amount.
