How to buy a home with no money down yourself how to buy a house with bad credit. You need to take action instead of just sitting down and getting desperate. Use this guide to do exactly what is needed to secure an affordable deal that will allow you to buy a great house.
Improve your financial situation before you even consider applying for home financing. Experts recommend waiting for some time after foreclosure and/or bankruptcy. The longer you wait the lower the interest on your loan will be. It is best to wait for around two years, but if you think you can afford to incur greater financing costs, you can readily apply for a loan after six months.
Boost your credit score and your credibility as a borrower. According to experts, you will need a score of at least 580 to get sufficient financing to buy a home. The best way to improve your credit score is to pay your monthly bills on time. You can readily get a major credit card, as these are readily available for people with poor credit but no debt. Use less than 30% of the limit every month and do not transfer debt to the next. To improve your credibility as a borrower, you need to have a secure monthly income from a regular job for at least a year, before applying for a home loan.
Save a down payment of at least 10% of the value of the home you want to buy. Generally, it is a good idea to consider the available amount of financing before you get to choose a home. In this way, you can choose a house that you can afford. In addition, you can decide on the amount of money that you need to save. Just keep in mind that the higher your credit score is the lower the down payment will be, so keep working in both directions instead of wondering how to buy a house with bad credit.
Get a home loan that you can afford to repay. There is no point in going though a cycle of foreclosure and bankruptcy, especially for a second time around. It is best to get a loan that has monthly installments smaller than one third of your monthly income. If you can reduce the monthly cost to less than 28% of your income, this will be perfect. Just try to avoid falling into the trap of lowering your installments by extending the loan too much as this will result in greater costs.