Banks thrive off of people with bad credit. You may be asking yourself why a bank would want to thrive off of a person who has less than perfect credit. There is one major reason and that reason is because they can make more money from you.
Traditionally, if you have bad credit and are taking out a home loan, you are going to pay for it big time. However, there are some solutions to bad credit home loans that the banks just do not want you to discover.
- Put more money down
It might take a little while long to save, but the less money you have to borrow, then the better off you will be in the long run. If you can save, save, save and then put that large down payment down on your house you have already beaten the bad credit loan solution. Overtime, you will be able to refinance and even lower your high interest mortgage the bank is charging you.
- FHA Loan
The government has made it easier for people who have bad credit to take out house loans. Of course, taking out a loan through the federal government is no walk in the part, but it is better than paying an arm and a leg for a high interest rate mortgage. These housing loans with the government are known as FHA loans.
Some of these loans require a high credit score and some do not. Several banks in your area offer these loans; you just have to ask which loans are available to you. There is quite a list of qualifications you must meet, but it is totally worth it to purchase a home that has a lower interest rate.
- USDA Loan
Many people get FDA and USDA loans mixed up, but there is quite the difference. USDA loans are unique in the fact that they are loans meant for houses built or bought in rural areas. There is a tight criterion that you must meet in order to qualify, but it is totally worth checking into. The one bad thing about a USDA loan is that you can’t make above a certain income level.
This varies by state and sometimes by location. Just keep in mind that USDA loans are specifically special because you don’t necessarily need a perfect credit score and in most cases no money down.
- Leasing to Buy
Banks want you to pay their high interest rates. However, there is a solution for those who have bad credit and want to own a home. Leasing a home is the perfect solution for someone who wants to buy, but may not be able to fork over the money or the credit score necessary to secure a home. Leasing a home is a little difficult because you have to find a home owner willing to lease the home. A little searching can help you land the right home to lease and eventually by.
Owning a home might seem like a far reach for those who want it now. But with a little planning and an unorthodox way of buying, you too can own a home. Sometimes bad credit isn’t your fault, so why should you have to suffer? Consider using these 4 bad credit home loan solutions that the banks never want you to discover!