How to Get a Mortgage with Bad Credit

To Buy a House You'll Need a Mortgage

I see it all. I see people who are confident in their quest to find a house and people who won’t even try. It’s no doubt that people feel most secure about purchasing a house when they have a steady income and a great credit score. Unfortunately, many clients resort to renting because they assume they can’t qualify for a mortgage without even checking their credit score! That’s crazy! I am on a mission to change that. To buy a house, one must obtain a mortgage. I will walk you through how to get a mortgage with bad credit. If this is you or someone you know, today’s post is for you.

Are All Loans Built the Same?

No. There are so many types of loans and mortgages out there. There is the classic conventional mortgage, which my friend Dave Ramsey describes really well. As he states, “the ideal down payment for a conventional mortgage is 10-20%, but the good news is that it’s not imperative!”

There is the FHA style mortgage, where you can have a lower credit score, but the down payment gets slightly higher as the score gets lower.

A very unconventional but effective mortgage is a bond for deed. Banks don’t like this because it’s not a loan from them. A bond for deed is a legal contract that an attorney draws up between buyer and seller. I like a bond for deed because it creates opportunities for my clients with less-than-stellar credit to buy a home! My point is, we’ve got options if you want to jump in and get a mortgage with bad credit.

Should I Wait and Repair My Credit Score?

Hitting the pause button to repair your credit score can be the right move for some clients. According to lender Tommy Manzella of Gulf Coast Bank, he states “Once I review a credit report, I can determine what the best action steps are based on how the accounts are being reported by each debtor.” Waiting, while interest rates are low, can feel like a gamble because rates could go up. However, they could also go down.

I like the idea of investing some time in repairing your credit score. The long-term benefit could significantly outweigh the short-term gain of obtaining a mortgage with bad credit.

If you are sitting in a dark room and biting your nails in fear of seeing your credit score, at least pull the report. Each year, you get a free credit report and it doesn’t harm your credit score. It will show you every single open account attached to your name. In some cases, folks have found items on theirs that didn’t even belong to them! I can’t stress enough how important it is to know what your credit history looks like. If you need moral support to look it over, call me or grab a trusted friend. Do yourself a favor and know the reality of your credit score.

Your Credit Secret is Safe with Me

As your trusted realtor, all of your information stays safe with me. My duty and hope is that my clients feel exceptional about any transaction done with me. The more I know, the more I can help. That also goes for my phenomenal lenders with whom I work. Lenders have seen it all. Together we make plans for anyone who wants to buy a house...to buy a house. A home. A little piece of the world that belongs just to you. Your place to make crazy lawn designs, paint your rooms wild colors, or just plain build your wealth. You don’t have to be afraid of figuring out how to get a mortgage with bad credit. Not with a support system like mine. Let’s do this, let’s get you that house and stand proud while you pave your own way.