Buying Your First Home with Bad Credit

These days low interest rates mean more and more people will be eligible to purchase their first residence. This is great news, because a country of devoted home owners means the population is stable and responsible. That’s really great information for all of us to hear in times of economic upheaval.

Setting out to purchase your first place can be a huge adventure. That’s why you see shows on HGTV about people becoming unglued during the search process. With a few helpful hints, though, you will be on your way to home ownership. Here is how:

- One year out. At the point where your first place is just a twinkle in your eye, that’s the time to start preparing your financials, especially if you’re trying to buy your first home with bad credit. You want your credit score as high as possible, so pay particular attention that you do not pay any bills late. Also, make sure there are not any unfounded details on your credit statement that are not correct. If there are, take steps according to the credit agency’s procedures to have them removed by disputing them.

- Save. Having a down payment can reduce the size of your monthly payments (especially if you’re trying to get a home loan for self employed people). Cash on hand also proves to your bank or mortgage company that you are serious, and also that you can afford the monthly payment a home requires.

- Search. You may not be ready to buy yet, but that’s fine because you want to identify some areas that might be appropriate for you in your town. Knowing the neighborhoods that suit you is important.

- Ask your buddies who they use for a realtor. Find someone who like and whose professional skills you respect.

- Mortgage lender. These days you do not want to wait til the last minute to find a bank loan. It takes longer nowadays than it used to, to secure home loan financing. Start with your existing bank or with one of the resources identified by your real estate professional.

- Pre approval. After you have completed preliminary financial statements and applications, you will get a bank letter, which is basically like a letter of authorization that says you are a person of substance with the resources to finance a home up to such and such an amount (and it will list the maximum financial amount of a home you might qualify for).

- Now start looking for banks that lend to people with bad credit. Only when you have all your ducks in a row should you actually start home shopping. How long it will take is anyone’s guess. The supply of homes on the market at any give time varies, and it may not include your dream home initially.

It can be a journey to purchase a home. Just keep your faith that it will all work out, and it will.With the help of your banking and real estate team members, you will be able purchase well, taking advantage of the latest information in the market.