The American dream is to own your own house. However, this dream has shattered in lieu of the recent subprime mortgage shakedown. Buying a house with bad credit is no longer as easy as it was and indeed, even keeping a home from foreclosure is hard. People are losing their houses left and right, jobs are being scaled back at an alarming rate, and the American economy is on the point of collapse. All the old rules have now changed. In this new environment, the same loan rules don’t apply now. Credit history is even more important than it was before. So, how to buy a house with bad credit? Is buying a house with bad credit still even possible?

Yes, it is still possible to buy a house with bad credit. There are a few options out there (even in today’s recession) that can avail you a home.Indeed, if you know what to look for, a recession can even afford you some amazing deals on homes. You can buy a foreclosed home for very cheap these days and the prices of houses has dropped significantly, making it a investment homes a steal. However, many of these opportunities will depend on having good credit. But if you don't have good credit, don't worry, there is still opportunity.

With bad credit quite common these days, it's no wonder that people want to know if buying a house with no money down and bad credit is possible. Well, the answer is yes -- if you want to know how to buy a house with poor credit, it's still possible, though much more difficult now. However, the key thing is to spend a good deal of time researching all the various options you may end up encountering.

The best way is called a Lease Option. Now, assuming you are renting, you probably fall under one of the categories below:

• No money saved up for a down payment on a house

• More than 2 credit cards

• One or more lines of credit open

• You have missed past payments on credit cards or other bills and receive debt collection letters

• You have previously declared bankruptcy or experience house foreclosure.

• You’ve been turned down for credit card applications

• Loans have been declined in the past
  

This is a classic case of a person suffering from a poor credit rating. You are forced to live on the outskirts of the financial world, watching other people access essential services like house mortgages, low interest credit cards, etc.

You are probably very tired of facing credit rejections. It’s an unfortunate fact that poor credit doesn’t just effect a person’s financial options but their very self confidence. It feels like you’ve been backed into a corner and there is no way to escape from financial uncertainty. Owning a home, at this stage, certainly seems like nothing more than a fairy tale. If you have been wondering if you should consider buying a house with bad credit, then this can be a bit of a downer.

And it’s true. The sad truth is (and you may not want to hear this) is that if you want to own a home, you are going to have to do one of two things:

1. Improve your credit rating and then apply for a home loan in the future. This prospect can take anywhere from 1 to 10 years. Meanwhile, you will still be rending all the while.
2. Find a lender who over looks your bad credit, giving you a chance to own your home. Now, you can accomplish this several ways. The traditional way is to seek out a company that specializes in bad credit loans and apply. There are two types of loans you may qualify: bad credit secured loan and a bad credit unsecured loan. It’s highly unlikely that you can get a secured loan, as you don’t any sort of assets to put down. So it will be a bad credit unsecured loan. These days, banks are very leery of giving out unsecured loans for people with bad credit. You may still be able to get one, but it will be based off you ability to repay (your income level).

The other option is to pursue what’s called an “Owner Financing” solution. This is probably the best deal you will be able to get. You want to look at a Lease-Option with owner financing, as this is the safest bet for both owner and buyer. This is one way you can easily buy house no down this economy.

Here are a few reasons why Lease Option Owner Financing is a good solution.

• When you entering in the lease-option agreement with the owner, you are allowed the live in the home as if you actually own it. It’s practically “your home.”

• The details of the arrangement are pretty simple. You sign an agreement with the owner of the property in which you rent the home for a period of time (usually a year or two) and as soon as you qualify for a home loan within the agreed time period, you buy the house at the originally negotiated price. You are basically “leasing” the home with an option to “buy” it. This is actually a great arrangement since the owner overlooks your bad credit and you get a few years to fix it up and prove to the banks you will make a good loan candidate. You get to enjoy the following benefits:

• No dealing with landlords. You can treat the home as yours, meaning you can make whatever renovations you wish.

• As the home appreciates in value, you get to “cash in” on that increased equity when you buy the house. This is because you buy the house for the original negotiated price. Since house prices tend to increase with time, your house will likely be worth more than when you first “leased it.” Buy the house at the lowered price and all the equity is yours. You are essentially locking in the tomorrow’s market price today.

The biggest advantage here is that you can get this deal signed with bad credit or even no credit. It’s difficult to buy a house with no credit or to buy a house with bad credit. This Lease Loan option gives you that.

The ultimate cause of your problems is your bad credit. You should try and fix it as soon as possible. However, you can still function without having good credit.So follow the tips above if you want to know how to get a home loan with bad credit -- they are a good place to start your search.

Here are some related hubs that offer some strategies:

• How to Improve My Credit Score

• Help Paying Back Student Loans

• Lenders for People with Bad Credit

• Student Loan Reconsolidation

• Home Equity Loans for People with Bad Credit

• Business Loans for People with Bad Credit

• Cell Phones with Bad Credit

• No Money Down Property

• Buy House No Money Down

Owning a home is very possible, even in the recession of today. Many property owners are eager to offload their homes because of the declining price. Yes, he market value is bad now, but house prices will shoot back up. Maybe not for the next couple years, but if you buy with the long term in mind, you will make a lot of money in 5 or 10 years. This is how to buy a house with bad credit.