Good credit is normally important when closing on a home, but you do not need to worry too much if your credit score is on the low side. Fortunately, it is still possible to buy a home for sale in Irvine even if you have bad credit. Use these tips to close on your dream home even if bad credit is delaying your loan process.
Examine Your Credit Report Carefully
Many people with low credit just accept their score, but the reality is that big credit reporting companies make mistakes all the time. Review your credit report carefully for any issues. If you do find any, file a dispute by writing a letter or filling out an online form. This can help clear up issues and provide a little boost to your score.
Offer a Bigger Down Payment
This choice takes a bit of saving up, but it is one of the best ways to buy a home if you have bad credit. A bigger down payment means your credit does not affect your mortgaging options as much. Having high down payments assures loaners that you are not likely to walk away from a home you have invested so much in, and it also means you do not need such a large loan.
Be Flexible on Potential Rates
There is no way to sidestep making some sacrifices when you want to buy a home but your credit is bad. A bad credit score often means you do not have the luxury of shopping around for extremely low interest rates. Because a person with a low score is a higher risk for lenders, they may require getting a higher interest rate. The good thing is that interest rates are rather low right now, so even a seemingly high rate could end up being decent in the long run.
Provide Documentation for Extenuating Circumstances
You may still have a chance even when your credit score is on the lower side if you can prove you are no longer experiencing the issues that caused the low score. Bring documentation to show you are addressing your financial issues and moving toward stability. Though this approach is not foolproof, it may reassure the loaning agent that you are not a risky investment and help you get a slightly more favorable interest rate.
Get Someone to Cosign on Your Loan
If you qualify for an FHA loan, which is possible even if your score is as low as 580, then you can have a co-borrower who will not live in the house. Convincing a relative or friend to be a cosigner can be difficult, but if you find the right person you can get a loan even with bad credit. Just make sure you choose a trustworthy cosigner with good credit.
Whether you’re looking in Cypress Village or El Camino Real, Irvine real estate may be difficult to purchase if you have a low credit score. However, this doesn’t mean it’s impossible and that you should stop looking. Get in touch with OC Residential today, and we can help you find a property that suits your needs. Call 714-454-6304 to see the latest listings.