There are any number of reasons that a person could end up with poor credit and not all of them come from being lazy or cheap.
Bad credit can happen for all sorts of reasons, and they don't all stem from laziness. People can get in accidents, fall to the mistakes made in their youth, get sick, become hospitalized, and move where there is poor mail service. Then, sometimes, circumstances change, people grow up or recover from their misfortunes, and they find themselves destroyed by bad credit. It is hard to find someone who doesn't want to be a homeowner; there is a sense of security that comes with owning a home that belongs to you. However, it is hard to close the gap between bad credit and owning a home. The question then becomes, can you buy a home with bad credit?
The easiest way to own a home with poor credit is to try your best to get your credit back on track. If you can pay 2% on the mortgage loan interest rate, you will be saving over $70,000 throughout the years. The best thing is to order a free credit report and to go over it with a fine tooth comb. If you find any disputes that you want to take up with creditors, dig up your receipts, and write some letters trying to straighten out whatever is being falsely claimed. The law states that the credit agency will have to address the dispute within 14 days or they will have to remove the disputed item completely. After all of your disputes have been settled, you should insist that there be a new (and corrected) report sent out to all of the creditors who have received your report in the last six months. The process of having the corrections sent out is laborious, but it could mean a greater chance of you owning your own home, so be persistent.
One way to own a home with bad credit is to go straight to the source. Many homeowners are willing to sell you a home under a selling finance agreement. This agreement provides a "contract" that allows you to make payments to the actual seller instead of making payments to a bank. Another option when buying through a seller, especially if a down payment is not an option, is to find a seller that is offering a lease-to-buy option. When you do a lease option, you will have to work out the math ahead of time to determine how much rent is going for a down payment, and after a certain period of time, how much credit you are going to end up with.
When you own a home there are many ways that your home can make money for you. If you continue to keep up with your payments and send them in a timely fashion you can increase your credit rating. This in turn can help you when you make the choice to refinance your home. Refinancing your mortgage can give you more money to use towards paying off other debts as well. In this way you lower your house payments and erase some of the other debts you may have all in one shot.
Becoming a homeowner is a gratifying decision, but it can also be a taxing one. Make sure that you don't become overzealous when trying to pick out a house to purchase. Don't try to live beyond your means, especially when your credit is less than ideal. Buy a house that is big enough for what you need, but cost efficient enough that you don't find yourself in greater financial strain.
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