Tips for Buying a Home with Bad Credit

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Here are some of the steps you should take to help you buy a home even if you have bad credit.

It’s no secret that buying a home is difficult and stressful. However, attempting to purchase a home with bad credit is even more so. Luckily, your bad credit doesn’t need to cost you your dream home; there are things you can do to help you through the home buying process. Here are some steps you should take if you are attempting to buy a home with less than perfect credit.

  • Check Your Credit Score

Before buying a home, check your FICO credit score. Keep in mind that you have three credit scores, one from each major credit bureau. Mortgage lenders will throw out your highest and lowest score and use your middle score when assisting you. So, checking your score now will give you a good idea of where you stand.

  • Address Any Errors on Your Credit Report

Sometimes, your bad credit is a result of an error on your credit report. So, be sure to comb through your report and highlight any issues. Dispute any mistakes with the credit bureaus to ensure that your report is as accurate as possible.

  • Try to Raise Your Score as Much as Possible

Before applying for a home loan, make sure you do everything you can to bump up your score. To start, try to pay down the balances on your credit cards. The lower your balances are, the higher your credit score will be. You should also try to get any collections on your credit report removed. This is because paying a collection amount will not increase your credit score unless it is removed from your credit report entirely.

  • Find Low Credit Mortgage Lenders

FHA home lenders have low credit score requirements (500 score with 10% down). However, not every lender will work with buyers who have bad credit, so make sure you look around until you find a lender who will work with your scores.

  • Get Pre-Approved

One you find a lender, you will need to get a pre-approval letter. To get pre-approved, your loan officer will need access to your credit and will need to verify your income and bank documents. So, be cooperative and supply the information they need.

From here, you should be good to start house hunting.  With the right real estate financing professionals on your side, you can successfully purchase a home regardless of your credit rating.  If you are looking to buy in the Hermosa Beach area, then you need the expertise of the professionals at Brighton Escrow.  Contact us for the top-tier escrow service that you deserve.