I get questions every day about the options people have when they are interested in buying a house with bad credit.
Are there still options?
Can you get into your dream home when you have less than perfect credit?
The truth is, your options are much more limited than they were just a year ago, and FAR more limited than they were before the mortgage market began its implosion.
(I can remember a time when if you had a pulse and a job you could get a mortgage!)
FHA loans are probably the best options for buying a home with bad credit in today’s market. Even with an FHA loan, the standards have tightened considerably.
You will now need a minimum of a 620 credit score. If you have filed Chapter 7 Bankruptcy, you will need to wait at least two years from the date of discharge to qualify for an FHA loan. If you filed Chapter 13, you will need to wait at least one year from the discharge date. If you have any late payments after your bankruptcy, you may be denied. If you have had a foreclosure, you will need to wait at least three years. For the best results, you should find a bad credit mortgage broker to work with. They will have the knowledge to help you get the best possible loan based on your situation.
These requirements show you that buying a home with bad credit isn’t as easy as it used to be! Your best course of action is to actively engage in credit repair and consider finding a rent to own home in the meantime!
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