Bad Credit Home Loans
Trying to buy a home with bad credit may seem impossible and it is true, most lenders will turn you down. Up until the mortgage market crashed, there were many options for so-called subprime borrowers. Many lenders were even willing to finance the entire purchase price for borrowers with less-than-ideal credit. Today, however, those options have shrunk considerably but there are a couple approaches you can take if your bad credit is proving to be an impediment.
The first and most obvious step is to improve your credit. If you are turned down by a lender due to your bad credit, find out exactly how much you need to raise your credit score in order to qualify for a mortgage. The fact is, no matter how poor your score is today, by taking the right steps, you can improve you score to good or excellent in less than two years.
One other option to investigate is FHA purchase loans. The loans have less strict credit requirements than traditional mortgages and are an ideal option for bad credit borrowers. FHA loans are also an excellent option for borrowers who may not have a sizable down payment. Conventional loans may require as much as 10% to 20% of a home’s value but FHA loans may only require as little as 3%. Also, you can acquire an FHA on pre-fabricated and mobile homes too.
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