How can you qualify for a mortgage for buying a home if you are low on savings and don’t have perfect credit?
Everyone is interested in buying a home today but not everyone can. Between low mortgage rates, sweet deals on homes and the anticipation that home prices will continue to rise from here on out there has never been a better time for buying a home. But what is you have had a few late payments recently and are afraid of using up the little saving you have?
While getting a mortgage can be a lot harder today many people aren’t aware of the low down payment home loan options that are out there. Both VA and USDA mortgages provide 100% financing, while FHA still only requires 3.5% down.
If you are still coming up short, make a solid plan and budget for saving for your down payment. Saving just $250 a week or $1,000 a month will give you $24,000 towards buying a home in 24 months from now. That’s plenty to get a deal on a pretty nice home in most parts of the country.
If your credit score is holding you back from buying a home then recognize that in most cases lenders only go back 24 months when looking at your payment history (with the exception of foreclosures and bankruptcy) and it is often more a lack of new good credit than bad which is affecting most people’s credit scores.
Even if you are starting from scratch with no credit right now, by obtaining 3-5 secured credit cards from local banks or credit card companies you may be incredibly surprised at just how great of a credit score you can have in 2 years from now. Just make sure you make all payments on time as priority and keep good records.
If that is just too far away for you to wait then look into seller financing or rent-to-own options for getting into a home right now.
