Buying a Home with Poor Credit


August 15, 2016

When your credit score has suffered from debt, there are many things that can be impacted. As your local lawyer near me the Law Office of Michael A. Ziegler continuously works with people that have found themselves in debt. One of their major concerns is how their credit will affect buying a house.

Your credit score is impacted by your payment history, debt to credit ratio, amount of credit history, and new credit. Mortgage companies take all of these factors into consideration. Poor credit can have an impact, but there are steps you can take to try and beat the barriers created by bad credit.

Buying a Home with Poor Credit

The first thing you need to do is establish your financial status. You want to show that you can make the mortgage payments, despite your history. Records of your weekly, monthly, and annual income should be on hand. Your living expenses for the month should also be included. What you are looking for is a surplus that would allow you to pay your mortgage without struggling. If you aren’t there, maybe you should figure out where you can conserve until you reach that place.

If you are financially able to handle the payments, you may be able to find a responsible cosigner. Lenders will be more likely to give you a chance if a cosigner is taking responsibility. In addition, you may get a better interest rate. If you fail to make your payments and default on the loan, the cosigner will be required to pay.

If traditional avenues aren’t an option, look at Federal government insured loans. They are less strict with their guidelines. The Federal Housing Administration and the Veterans Association both offer mortgages with more lenient restrictions.

Pay off any debts that you can before applying for a mortgage. Get your full credit report and history to see what’s affecting your score. Maybe there’s a lingering bill you forgot about. If you can take care of a few items before applying, it could help boost your score and make your application process easier.

Finally, plan as far ahead as possible. If you can take some time to pay off debts, it will only benefit you. If you can also save money for a sizable down payment, this will help you get approval and possibly lower your interest rate.

At the Law Office of Michael A. Ziegler, getting you back on your feet is our first priority. If you are facing debt, we can help you figure out the best option to put your finances back together. Ask yourself, “What can a lawyer near me do to help me out of debt?” We can take a look at your case, answer your questions, and base your next course of action on how you want to rebuild your financial future.

Share this Article

About the Author