Unless there is a rare circumstance, people with low credit scores can generally count on not being approved by the bank for a mortgage loan. Now, can you still buy a home without a good score? Probably. There are other types of loans you can get without a private lender or a traditional bank. But, know that your options are definitely going to be limited by your low score, and you’re going to have a rough time getting one. If you still want to buy a house, though, here are some options to get a mortgage without a great credit score. See: Mortgage Calculator to see what you’d be able to afford (approximately).
Expect to pay more than you normally would have to.
Those with bad credit usually can still get a mortgage, but its going to cost them. You are going to have to pay way higher fees than people with great credit. You should definitely do your homework when it comes to choosing a lender, because typically the lenders that work with people who have terrible credit are predators. They take advantage of these people, because they know that they are desperate to buy a house. This means they’ll probably stick you with extremely high interest rates, and all sorts of other hidden fees.
Be sure that you refinance as soon as you can.
If you have bad credit, you may feel like you’ve just signed your entire life away after you sign the loan. Don’t worry too much. As long as you keep up your credit score afterward, you should be able to refinance in about 2 years. This means that you’ll have a shorter loan-term, and much lower interest rates! Plus, your credit will have gotten even better since you’ve been making (hopefully on time) payments.
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ARMS (adjustable rate mortgages) are also a strong possibility, that you shouldn’t quite rule out. It will depend on your circumstances. You can pay a lower interest rate while working on repairing your credit score. Going with the ARM might be a better idea that paying for a fixed rate mortgage.
Consider asking someone to cosign for you.
If you get someone to cosign, make sure that they are responsible. If you default, they’re going to have to be able to pay it. You may be hard pressed to find someone willing to sign for you, though. A mortgage is a huge responsibility. Something that not many people would be willing to take on for another person. Check out this article on Bad Credit Mortgage Loans: Home Loans With Poor Credit.