Having bad credit may make it harder for you to get a loan to buy a house, but achieving this goal is not impossible if your credit is less than stellar. If you are in this position, it is important to know that there are lenders that look at things other than just your credit score. These types of lenders will take other factors in mind as they review your loan application, and here are some of the factors that can improve your chances of qualifying for a loan so that you can buy a house.
The amount of cash you can use for the purchase
While credit is important, there are other things that are also important when trying to get a loan to make a house purchase. One of the top things is cash. If you have cash in your bank account and can use it to buy a house, you will have a better chance of finding a lender who will approve a loan for you. The more cash you put down means the less cash a lender must finance to you. This reduces the risks the lender has, as most people will not put a lot of money into a house and then just stop making the payments. People value their money, and they will work hard to keep a home they put a lot of cash into.
The length of time you have at your job as well as your income
Many lenders will also factor in the length of time a person has at their current job as well as the amount of income the person earns. If you have a great job where you earn a large salary, this can also improve your odds of getting approved to buy a house.
The amount of money you currently pay for rent
Another factor you should know about that lenders may also consider is the current amount of money you pay for rent. If you are paying $1,200 a month for rent right now and want to buy a house that will end up with a $1,000 a month payment, you should have no trouble paying this, as it would not be payment shock to you. You would actually spend less money each month if you bought a house like this, and that is why lenders will often look at this too when evaluating a loan application.
If you are in a financial position where you can afford a house but do not have good credit, there are options. You can learn more about buying a house and the options you have for loans by contacting a residential real estate agent.