How To Buy A House With Bad Credit

If you were laid off from work or have had a series of misfortunes, you may be wondering how to buy a house with bad credit. While it may be a little harder for you to do so, there are some things you can try that might get you into a new house sooner than you think, even if you have bad credit.

  1. Check your credit score. You may discover your credit is not nearly as bad as you thought it was. Make sure to check your score with all three of the major credit reporting agencies: Transunion, Experian and Equifax.
  2. Become pre-qualified with a mortgage broker. A mortgage broker can help you determine how much of a house you can afford and what type of payment you would have. She may also be able to tell you some things to do that will help you to improve a bad credit score.
  3. See if you can qualify for a federal mortgage program. The government has an agency that provides housing counselors to help determine if you qualify for a government housing program. If you have had to file bankruptcy or developed a disability that affected your income level, you may be able to participate in this program and receive assistance in buying a house.
  4. Find a lender that gives loans to people that have bad credit. If you now have steady employment, are repairing your credit and can provide a substantial down payment, you may be able to get a loan with a mortgage company that specifically deals with people who have been through bankruptcy or have bad credit scores. Not all of these companies are reputable, however, so beware of companies who request fees up front or seem to promise more than they can deliver.
  5. Consider a lease purchase. Some homeowners who need to move quickly or have already purchased another house may be willing to lease the house to you for a specific amount of time, allowing you to make the house payments directly to them. After this period of time (usually six months to a year), you are then expected to have your credit improved enough to be able to purchase the house from them.


U.S. Department of Housing and Urban Development

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