YES YOU CAN own a home with "less than perfect" credit
A Quick Look at some of the possibilities
- 100% financing w/ 580 credit in some cases
- Financing for credit scores as low as 500
- Recent bankruptcy or foreclosure
- Self-employed financing w/ bank statements
- A low fixed rate possible
- FHA streamline and VA IRRLs available
Iowa Mortgage Solutions
We have been a mortgage broker in Iowa since 2005 and have seen almost every mortgage situation imaginable.
Buying a house with less than perfect credit
We all know that paying our bills on time and not overextending ourselves is important to maintaining a decent credit score. That being said sometimes life can catch us by surprise. The important thing to know is that you are not alone. There are options available for people who have less than perfect credit. Don’t let financial hardships or past mistakes stop you from living the American dream.
You are a target
Credit card companies or businesses constantly target almost everyone over the age of 18 with easy to obtain high interest credit cards or payment programs. A lot of times these companies advertise introductory deals such as no interest or payments for a certain amount of time or other such offers that make them sound attractive. When someone is short on money or has something they really want, these offers seem like an easy solution.
Just say no
It is best to avoid these seemingly easy solutions whenever possible. Not because these deals are bad but because most of the time that people accept these deals it is not out of necessity but desire. This is when you get into trouble. It is all too easy to sign up to buy something that requires no money down or a 0% introductory rate. Though you fully intend to pay it off quickly, the temptation to sign up for more deals or unforeseen circumstances can let your situation get out of control quickly.
There are various ways that someone’s credit to take a hit. Something as simple as a car breaking down can put many Americans in a bad situation. Things such as major medical issues, unexpected loss of income, and other unforeseen expenses can damage someone’s credit. Or, perhaps you just made some poor decisions.
The good news is…
Fortunately there are lenders out there who are willing to take on loans with people that have made mistakes in their past.
It is important that you are dedicated to improving your financial situation. Borrowing more money will not miraculously change your spending habits. Buying a house is a huge step and it is import for you to show yourself and lenders that you are ready to take the next step.
Checking your options with a mortgage broker
The biggest mistake people make is that they limit their options to where they currently bank. Mortgage brokers are a great way to explore your options. This is especially true for people with less than perfect credit. Because brokers work with several banks and lenders, they typically have more options than traditional banks. These options range from government sponsored mortgage programs to grant programs that help cover down payments and closing costs. Lenders that specialize in home buying often have less stringent borrowing requirements than traditional banks. Checking with a mortgage broker can be a great way to see exactly where you stand.
Limit who you let run your credit report
The reason this is important is that everytime your credit report is ran it affects your credit score. This generally has a low impact on your score but if you already have a poor credit score every point is going to matter. People have lost their approval from having several different lenders individually run a credit report. This is another benefit to working with a mortgage broker. Brokers will typically run your credit report only once and use that report to approach several different lenders.
After you buy your house
It goes without saying that is important to make your monthly payments on time. This is especially true for people with less than perfect credit. The reason being, that most lenders will refinance your loan after 6 months to a year of on time payments. This is very important to realize because generally speaking initial mortgage terms for people with less than perfect credit can be less than optimal. So find out when you are eligible for refinancing and talk to your mortgage broker as soon as the time is up.
Owning a home is a huge part of the American dream. It may take a few sacrifices but, any hard working adult in America can be a homeowner. If you are from Iowa see where you stand today. If you are from a different state just google mortgage broker in (your state) and get started on the path to a new home today!