Buying your first house is a huge commitment and the first thing you’ll learn when you start applying for mortgages is that the higher your credit score is, the easier it will be to qualify for a great mortgage. So, what can you do if your credit score is less than stellar? Believe it or not, it’s still possible to buy a house with a bad or low credit score. You just need to set yourself up for success from the beginning. Here are a few tips to keep in mind when you start your home buying journey.
Know Your Score First
The best thing you can do when buying your first house with less-than-ideal credit is to find out exactly where your credit score stands. You can check your score for free once a year through AnnualCreditReport.com. The website is secure and recommended by the federal government, so you won’t have to worry about falling victim to a scam. Once you know your exact score, you can plan accordingly.
Talk to Different Lenders
Different mortgage lenders will view your financial situation in different ways. Some may be unwilling to work with your credit score while others may view your score as acceptable and offer you a fair interest rate. The only way to know which one you’re dealing with is to speak to different lenders and get quotes from at least three before you commit to a loan. Remember, if the interest rates will push you over budget each month, you may need to wait and find ways to improve your score before you apply for financing again.
Look Into First-Time Homebuyer Programs
Buying your first house with a low credit score can be tough, but most states offer first-time homebuyer programs and grants to help make it easier. Talk to your real estate agent or mortgage broker about programs in your area and follow up with those programs.
Don’t Be Afraid to Wait
If your score is so low that qualifying for a mortgage is nearly impossible, you may want to wait a few months. During that time, focus on building your savings and paying down your existing debt as much as you can. This will help increase your credit score when you apply for a home loan in the future.
Get Started with Mortgage Applications Early
If you’re thinking of buying your first house, don’t wait to talk to lenders. Contact Mortgage Solutions Financial and explore your options before you find the home of your dreams.
