Having a bad credit history does not mean you cannot buy a home, but the stark reality is that you probably will have to pay more than a borrower who has excellent credit. Although the legal period between bankruptcy filings is seven years, your credit report can be adversely affected for an entire decade. The key to realizing this elusive American dream is to spend a good deal of time researching all the various options you may end up encountering.
There are two options for those with bad credit: a bad credit secured loan and a bad credit unsecured loan. Due to the fact that a secured loan requires assets, the chances are that bad credit will result in a bad credit unsecured loan. Due to the fact that banks are not anxious to make loans for people with bad credit, these loans are not easy to get. Getting a loan may still be possible for you, but your ability to repay it will be the determining factor.
Consider a Lease Option. This type of agreement is made with a property owner in which you are allowed to live in the home as if you are actually the owner. Usually the signed agreement is for a year or two and as soon as you qualify for a home loan within the agreed time period, you buy the house at the originally negotiated price. Technically, you are leasing the home with an option to buy it, which is a good deal because it gives you time to repair damaged credit.
There are other benefits associated with a lease option. For one thing, you don't have to deal with a landlord, and you can renovate the home, as you desire. Also, as the home appreciates in value, the increased equity becomes yours since you are bound to buy the house for the original negotiated price. In a way, you are locking in the market price of the future today.
Use credit cards to build your future credit rating, but don't overuse them. You can start to repair your credit by making monthly payments promptly. A secured credit card issued at a bank is one way to get a card when all other sources fail. A deposit is necessary which then becomes the card's credit limit. This card becomes a normal credit card, and you are refunded your deposit after using the card responsibly for about a year.
There are two options for those with bad credit: a bad credit secured loan and a bad credit unsecured loan. Due to the fact that a secured loan requires assets, the chances are that bad credit will result in a bad credit unsecured loan. Due to the fact that banks are not anxious to make loans for people with bad credit, these loans are not easy to get. Getting a loan may still be possible for you, but your ability to repay it will be the determining factor.
Consider a Lease Option. This type of agreement is made with a property owner in which you are allowed to live in the home as if you are actually the owner. Usually the signed agreement is for a year or two and as soon as you qualify for a home loan within the agreed time period, you buy the house at the originally negotiated price. Technically, you are leasing the home with an option to buy it, which is a good deal because it gives you time to repair damaged credit.
There are other benefits associated with a lease option. For one thing, you don't have to deal with a landlord, and you can renovate the home, as you desire. Also, as the home appreciates in value, the increased equity becomes yours since you are bound to buy the house for the original negotiated price. In a way, you are locking in the market price of the future today.
Use credit cards to build your future credit rating, but don't overuse them. You can start to repair your credit by making monthly payments promptly. A secured credit card issued at a bank is one way to get a card when all other sources fail. A deposit is necessary which then becomes the card's credit limit. This card becomes a normal credit card, and you are refunded your deposit after using the card responsibly for about a year.
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