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Tips for Buying a House With a Poor Credit History

More and more, people are putting off buying homes. One common reason for that decision is having a poor credit history. However, a rocky financial history doesn’t have to keep you from the dream of owning a home. By employing strategies to improve your finances and exploring mortgage options, and working with an experienced real estate agent at RE/MAX Capitol Properties, you can make it a reality.

Check Your Credit Report

Knowing your credit score isn’t enough when it comes to buying a house. The information in your credit report affects your score, but you need to review more than just this number. Since what’s in your credit report can make or break the home buying process, reviewing it should be one of the first steps you take when you get ready to buy a house. When you do, look for errors that might include:

  • Accounts that do not belong to you
  • Listed loans or lines of credit that have been closed
  • Erroneously reported late payments

Report any mistakes you find, which can be due to fraud.

You may also discover other negative factors that do belong to you. In that case, work to improve your payment history and reduce debt. Credit card balances should be your first target to improve your chance of securing the best interest rates possible on a mortgage. Many people have found success in applying the debt snowball method to eliminate balances quickly.

Understand Mortgage Options

The days of needing pristine credit to qualify for a mortgage are long gone. There are numerous ways to improve eligibility for a home loan, and crackdowns on predatory lending practices mean you can feel a little more secure in the process. Comparing fixed- and adjustable-rate mortgages can save you money, especially if you are looking at a short-term move.

If you are concerned about high monthly payments, paying points on your mortgage might be a good choice. In this situation, a lender provides a lower interest rate in exchange for an upfront fee. You’ll see lower payments immediately and can save a substantial amount of money on total interest over the life of your loan. Several factors can impact whether paying points is a good option for you, including the amount you have for upfront costs, your financial situation, the loan configuration and how long you expect to remain in the home. You might find it helpful to use a points calculator to explore this option further.

Research the Local Housing Market

Choose a couple of neighborhoods that interest you and research them. There are various online tools, such as neighborhood ratings, that can help you evaluate market trends. Look beyond basic conveniences and the styles of available housing. While those factors may influence a neighborhood’s appeal, they won’t provide a lot of insight into the current market conditions. Instead, look at things that might affect current and future house price trends. A few questions that might be helpful as you evaluate neighborhoods include:

  • Are home prices rising or dropping in the neighborhood?
  • How are the schools?
  • Are there jobs available in the area?
  • How well maintained are existing homes?

You can purchase a home even if your credit history is a little shaky. Taking proactive steps to improve your current financial situation can go a long way in bringing the dream of homeownership closer to reality. Additionally, many mortgage options can make payments more affordable.

Ready to get started with house hunting? Let the professionals at RE/MAX Capitol Properties be your guide every step of the way! Call us at 307-635-0303.

Thank you to guest blogger, Clara Beaufort of for sharing these buying a home with poor credit tips.

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