How to Get the House of Your Dreams with Poor Credit

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Everyone wants to get their dream home, but some of us have already destroyed our credit. It can be challenging managing school loans, credit cards, car payments, and everything else that goes into adulting. Late payments, job layoffs, and life can take our credit score from the 700s down to the dumps in no time at all. So, how do you get the house of your dreams with a poor credit score?

Below, you will learn the simple steps to get you back on the right track and buying the house of your dreams!

#1 Start Saving

Even if you have poor credit, you can still start saving. In fact, home sellers are more likely to work with you if you have a large down payment on the house that you want. Typically, if you have poor credit, you will want to have at least 20% of the total cost of the home as a down payment. So, for a $100,000 home, you will want to put down $20,000.
Start Saving
Saving can be tough especially saving that much money. Who has $20,000 lying around when they have poor credit? I totally feel you, but here are some options that can get you saving in a jiffy:

  • Move in with mom or dad. As long as you have a time frame, parents or family members are usually there to help you out. Save every penny.
  • Live in a camper. Seriously, campers virtually cost you no money. In fact, my parents lived in a camper for 6 months to buy their first house. It’s not ideal, but it is an option.
  • Open a high interest savings account. If you don’t want to sacrifice, you could open a high interest savings account. However, this will probably take you about 2-3 years to accomplish.

#2 Get that Credit Score Up

It is a lot easier to lower your credit score than it is to get it up, but it is possible. Start making your payments on time. Put them on automatic payments if you need to. Call creditors and ask for settlements to get bad credit off your credit report. Check your credit report to see if there is anything on there that shouldn’t be.

#3 Pay Off Debt

Pay Off Debt
Along with saving, you should start paying off debt. This is going to mean you have to sacrifice somewhere. Maybe you have to get a second job for awhile, but in the long run, it will pay off. The best advice I can give to paying off debt is to start with the smallest debt first and work your way up to the bigger debts. The less little debts you have, the more you can contribute to the bigger debts.

#4 Go With a Mortgage Lender for Poor Credit

Just because you have poor credit doesn’t mean you can’t get a mortgage at all. You may get a smaller amount to buy your home with or you may get a higher interest rate, but you can get one. Here are the best mortgage lenders for poor credit:

  • Lending Tree
  • J.G. Wentworth Home Lending
  • CitiMortgage
  • Navy Federal
  • Credible

#5 Consider a Fixer Upper

Think about getting a home that has the potential to be the house of your dreams. Unless you build a house from the ground up, there will always be something that isn’t quite perfect. So, instead of settling, buy a fixer upper and turn it into the house of your dreams. Here are some of the ways you can find a great deal on houses in your area:

Search bank websites: Many banks will list foreclosed properties for sale online.
Consider a Fixer Upper
Look for government deals: The Department of Housing and Urban Development lists foreclosed homes that you can make an offer on.

Go to your county office. Foreclosure houses are filed with the county office. Sometimes you can find them online, but if you go down to the office, you can get a list of them.

Many times foreclosure houses don’t have a lot of fixing up to do, but are sold at a great price. Do some shopping around and see if you can find one that would meet your budget.

You can also check with a realtor for specific fixer upper houses marked at bottom prices.

#6 Be Aggressive

The bottom line is that you have to be aggressive if you want the house of your dreams. Do your research, look at houses, ask about foreclosures, but don’t get talked into something you don’t want. Tell the realtors and mortgage lenders exactly what you want, get your credit up, your debt, down, and get that dream house that you want!

Whether you have poor credit, no credit, or good credit, you can always find a way to get the house of your dreams. This is America after all!