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By Robbie T. James
When you are on the lookout for a new home, it is undoubtedly an exciting time of life for you. And, the excitement is only more intense when you are going through the home-buying process for the first time.
There is so much to consider when looking at a home to buy.
Location/neighborhood, home size, number of bedrooms, and little details such as cleanliness and amenities all factor into the decision.
Needless to say, all of these factors must be weighed against one very important factor: home price. In fact, price is probably the biggest consideration that you have to come to terms with as you choose the right home for yourself.
Another important thing to consider is your credit rating. If you have a low credit score (say, under 600), you will obviously have a tougher time getting approved for a mortgage loan than you would if you had a score of 700 or above.
As a first-time home buyer with a bad credit score, it can be useful to seek guidance on two fronts as you shop for a home: in terms of the actual home selection and in terms of how to qualify for a loan given your FICO (credit) score.
If you are in the market for a new home for the first time, here are 5 tips to find first-time home loans with a bad credit score:
1. Look into FHA and other federal programs for first-time home buyers:
The Federal Housing Administration, or FHA, is part of Housing and Urban Development, or HUD, which is the federal department responsible for major U.S. housing programs. The FHA offers certain incentives and programs for first-time home buyers. Be sure to find out about their latest programs for people in your situation.
2. Find as much money as you can to use for a down payment:
Cash: it is something that always seems to be in short supply and is therefore something we all want to hold onto. But, if you do have any cash or cash-equivalent assets, it would be wise for you to pool them together at this time in order to put together a healthy down-payment for your home. Doing so can greatly improve your ability to qualify for a loan.
3. Set your sights on a nice home but at the lower end of your budget:
Again, price is key. You may want the best-possible home for yourself and your family right now, but choose to take the long view of the situation: you can always move into a bigger, better home in 5 – 10 years. For now, given your poor credit score, find a home that sports a reasonable price so as to increase your chances of qualifying.
4. Get intimately-acquainted with your credit report:
Your credit report is more than just all about the score: it is about the details, line-by-line, included therein. Spend at least 30-60 minutes reviewing your report. This will allow you to spot any misreported items that are essentially errors on your report. Also, doing so will allow you to be ready to answer any particular questions about your report, if asked.
5. Apply to multiple bad-credit home mortgage lenders:
This last tip is essential: be sure to apply for mortgage loans with bad-credit mortgage lenders. These are the lenders who specialize in working with people who are credit-challenged. They have methods for evaluating your credit situation in ways that go well beyond just a quick glance at your credit score. Try to build a list of (and apply to) at least 5 of these lenders.
Follow these 5 tips in order to qualify for first-time home loans with bad credit.
About the Author: Get access to more first time bad credit mortgage tips and lending resources at:
First-Time Bad Credit Mortgages
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Source:
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