Home Loans for People With Bad Credit - How to Buy


You have some options of home loans for people with bad credit that you may want to consider.  Even if your bank will not approve you for a mortgage, you can still buy a house by using one of these alternatives.  You could own your own house, even if you have a bankruptcy, foreclosure, or major delinquencies on your history.  Find out how you can still find home loans for people with bad credit, by looking at these traditional mortgage alternatives.

Land Contracts:  One of the many options for home loans for people with bad credit involves land contracts.  Essentially, you borrow money on the house from the property owner.  They are the one that finances the purchase for you, not a bank mortgage.  This is a really good alternative mortgage option, since it gives even those with a poor history a chance to buy.  Generally speaking, you will need to have a somewhat hefty down payment for this home loan for people with bad credit, but that will vary.  With some variance, the interest you pay will be competitive for other financing options those with poor histories have to check out, but will be higher than the going rate at banks for those with a decent history.  This is still a very good home loan for people with bad credit.

Rent to Own:  You will find rent to own options offered by some creative sellers these days.  This is a good alternative to mortgages and offers another option of home loans for people with bad credit.   If you are looking at how to buy a house with your history, this is something to consider.  Generally speaking, you will be buying a FSBO house and financing the property through the owner.  A portion of the rent you pay each month will go into a separate account.  When you have a good chunk built up in the account, similar to a land contract, you can then approach mortgage lenders, or continue to rent to own the house.  With this home loan for people with bad credit, you will generally forfeit the money in your account if you quit making payments for any reason.

More Traditional:  While bank financing for a house may be out of the question if you have a minimal down payment, you can find home loans for people with bad credit through banks, if you have a sizable down payment.  Save your pennies and look for online lenders that have lower history requirements.

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