You are interested in purchasing a home but you are experiencing one of the following concerns:
1. My Credit is Terrible
Not to sound like your mother but you should fix that immediately, a poor credit score affects a lot more than buying a house, it can affect your insurance rates and even your ability to get a job. Here are some links that can help:
A. Federal Trade Commission, the number one tip on this website is don't pay anyone who says they can repair your credit fast, or erased bad debt, these are likely scams. This site has links to free credit counseling services.
B. Dave Ramsey's Snowball Method of Debt Repayment, the key to this method is to pay off your lowest balance first.
C. The Avalanche Method, this method of debt repayment focuses on paying off your most expensive debt first.
D. The Stack Method, this technique says to pay off your credit cards with the highest interest rates first.
2. I Don't Have a Down Payment
Before saying that you don't have enough money for a down payment you need to find out how much of a down payment you need. While some conventional loans require 20% down, FHA loans can be as low as 3.5% and you may also qualify for down payment assistance. Here is a great article that will has some more information. Saving for a Down Payment.
3. I'm Self-Employed
This makes things a little bit trickier, you may need to change the way you file your taxes and reduce some deductions or look for a commercial lender. I have a lender who is currently offering bank statement loans. The bottom line is you have options so talk to your Realtor and your lender before resigning yourself to renting.
4. I Can't Find a House
Are you sure? Or are you ruling out homes for cosmetic reasons? Most cosmetics can be fixed easily and cheaper than you might think. Consider working with a Realtor that works with contractors or better yet is a contractor herself so you can get an estimate for the changes that you want to make before ruling out a property. There are even loans available that will allow you to roll the price of the repairs into the purchase of the home. These are called 203K loans, not every lender does these type of loans and the ones who don't will say they've heard that they are difficult. While there are more steps to completing a 203K loan, I have not found them to be exhaustively difficult. Again the trick is to work with a Realtor who both understands the product and who knows of lenders that are actively writing 203K loans.
If you really want to buy a home you certainly can do it. There may be steps you have to take and it may take a few years but before you know it you will be in a home of your own.
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