There are ways to get cheap home loans these days even with bad credit. This, however, will not be an easy procedure with a poor credit rating. But if you are willing to go through the process, here are some steps to follow. The most important thing is you would be able to get the house of your dreams in the end.
The first step in looking for home loans if you have a bad credit is to go to a trustworthy mortgage broker. He will know all possible means for you to get a home loan given your situation as he has a network of lenders, credit unions, banks and financing companies. He will know which lender would be able to serve you best.
You can also avail of an equity loan. This type of loan is ideal for people with bad credit who wish to avail of a home loan. This type of loan will utilize the house to serve as collateral or security. To qualify for this, the house you wish to avail of should be more expensive than the amount you would like to borrow.
Look for housing programs that offer a rent-to-own scheme. This involves renting the property for a certain number of years prior to getting a loan to buy the same property. You can get a home loan to buy the property if you were able to put up 30% of the total value of the house.
Look for a lease option. This is the same as a rent-to-own scheme where you intend to buy the property after leasing it for a certain number of years. A portion of the lease serves as a down payment. In the lease agreement, the price of the property should be declared. This is a good option for people suffering from bad credit as they will have sufficient time to clear up their payables as they save money for their down payment of the property.
Stay away from financing companies that offer housing deals which seem too good to be true. Once they find about your situation, they would take advantage of it for their own gain. There are those that will instruct you to pay a down payment or a deposit of $ 2000 prior to getting approved for a mortgage loan. When you check the house they are offering, you will find it worthless. You have paid a huge down payment and then are left with a mortgage for a valueless property.
You can also ask people you know if they in turn know of anyone wanting to sell their house immediately. There are homeowners that need to sell their house as they may migrate to other places. They may be willing to undergo owner financing where you will pay them every month a certain amount for a specific number of years.
There are many home loans available for people with bad credit. You just need be patient and resourceful enough to look for them. You can also look for such loans through the Internet to save you from time and effort. Just remember to be cautious of loans that seem too good to be real.