More and more Americans are finding themselves in dire financial circumstances. Debt has reached historical highs and peoples’ credit scores are truly suffering. If you are one of the many thousands who are suffering from bad credit, you don’t have to give up on your dream of owning a home.
Purchasing a home is a complex process that allows for many different avenues of achievement. You can still own a home, even with bad credit, if you follow some of the advice found in this article.
Can You Really Purchase A Home On Bad Credit?
The short answer is “yes”. Home ownership is not exclusively the right of those with good credit. If you are planning to purchase a home with bad credit, you need to understand that your purchasing process will be a little bit different.
Poor credit will increase your interest rates on a mortgage. Translation: You will end paying more for the same house, just in interest, because the mortgage company sees you as a riskier debtor.
In some cases you may need to wait several years before purchasing a home. For example, if you have filed bankruptcy, this will appear on your credit report for the next 10 years. It is certainly possible to improve your credit during those 10 years, but some lenders are incredibly hesitant to lend to those who have filed for bankruptcy.
Instead of approaching this from the traditional angle, consider the rent to own option. By signing a rent to own contract you can solve many of the problems that were just discussed. For example, rent to own options will allow you to put time between getting into the home and applying for a loan.
Is It Still A Good Idea To Buy A Home?
Now is probably the best time to purchase a home, even if you have bad credit. Interest rates are at an all time low as more and more homes go into foreclosure. As more and more homes go on the market, banks are forced to be more accommodating of home buyers.
Choosing the rent to own option allows you an advantage in this case as well. For example, you could use the leverage of a rent to own scenario to lock a home owner into a lower price, one that reflects the current market, while you get yourself into a position to purchase the home.
What Other Things Can I Do To Improve My Chances?
Homes are bought using the “triple threat” approach. It takes more than a simple credit rating to purchase a home. Credit ratings, down payments and low debt all play a factor in the decisions of mortgage companies to lend you money.
Rent to own allows you to get into the house of your dreams while you steadily put money aside for a very large down payment. Even if you have bad credit, you will be able to increase at least one of the things that make for a successful home purchase: the down payment.
If you are wanting to purchase a home, but are nervous about your bad credit, check out some of the rent to own options available on our website. Choosing the rent to own option will really allow you the opportunity to buy yourself some time to leverage your way into the home of your dreams.