Creative
financing:
If the seller is motivated, ask if they are willing to
carry back a second mortgage on the home. On approval,
you can set up a contract or agreement with the seller
that you agree to pay monthly payments on the property,
as a second mortgage. To make it easy on the seller, it
is best recommended to have an end date by which you intend
to pay back the amount owed. On an average, 2 years are
enough for you to refinance the second mortgage and the
seller does not feel permanently locked into the agreement.
Make a downpayment:
You may be able to qualify for a 100% financing even
with a bad credit. However, if you pay a 5-10% down,
your interest payments will be much lower. Try to save
as much as you can for your down payment. At times,
it is best advised to wait for a few months to be able
to make a down payment. If you cannot afford to have
a down payment, you may always refinance your loan later
for a lower interest rate.
Comparison shopping does help:
It is important to do a comparison shopping and get
loan quotes from multiple lenders. If you have a bad
credit, you will be surprised how much the interest
rate varies. Let the loan lender know that you are getting
multiple offers and you are considering the lowest rates.
Lenders will squeeze their margins to win your business.
Work on improving your credit score:
Request a free credit report from any of the credit
bureaus. If you were denied credit recently, you can
get a free report. Report any inaccuracies as soon as
possible. Now it is easier to report inaccuracies on
the websites for each of the three credit bureaus. Too
many credit cards can negatively affect your credit
score. Close the accounts that you no longer need.
Don’t let bad credit stop you from owning a home.
There are plenty of lenders out there to get a piece
of your business. Apply with multiple lenders and compare
their offers.