How to buy real estate with a bad credit score – the Dixon Pilot

Living with bad credit can often feel like a curse. Your credit affects a large part of the financing of your life and can ultimately make many areas of your life more difficult. For example, when it comes time to buy your first home or apply for a real estate investment, it is frustrating to have your application rejected because of your credit.

Fortunately, there are other forms of financing available when buying a home. To learn more about how to buy real estate with bad credit, keep reading the article below.

Use a private lender

One of the best alternative forms of financing to look for if you have bad credit is the private loan. Unlike traditional bank loans and credit unions, private lenders are often asset-based lenders.

This means that private lenders base their financing on the future value of your property rather than your current credit score or financial history.

Asset-based financing is just one of the many benefits of working with private lenders. Private lenders are also more flexible and give faster approvals. The informal and innovative review process of this financing option will give anyone, even those with bad credit, the opportunity to receive the best possible loans for their real estate investment.

Find a co-signer

Another option for those with bad credit is to find a co-signer. When you find a friend or family member with a higher credit score, they can help complete your mortgage application as a co-signer. Adding a co-signer to your application will automatically increase your score and increase your chances of receiving substantial funding.

However, be wary of your financial situation before including a co-signer on your mortgage. In the event of default, your co-signer is responsible for repaying your debt. This will drastically affect their credit score.

Make sure you have complete confidence that you will be making your mortgage payments in full before you hire a co-signer.

Make a substantial down payment

One of the best ways to convince lenders to ignore your credit score is to offer a higher down payment. When you make a substantial down payment, lenders are more likely to accept your mortgage application and provide you with financing, regardless of your financial history. Consider taking a look at your savings to see if this is a viable option for you.

Down payment assistance programs

Buying real estate is not a cheap task. That is why there are tons of down payment assistance programs that offer grants to people with lower credit scores.

There are down payment assistance programs across the country that specialize in helping people with bad credit receive credit and provide financing. If you haven’t already, consider reviewing the types of down payment assistance programs in your area for more information.

Bad credit shouldn’t curse your entire financial future. While it may seem like an endless curse, there are plenty of ways to overcome this financial roadblock. We hope that our guide on how to buy real estate with bad credit has helped highlight some of these alternative forms of financing available.

Before buying your first home or investing in real estate, consider reviewing this list to find the best approach to coming up with a manageable payment plan for your mortgage.

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