Shopping for a new home while standing on shaky ground with a subpar credit score can feel like an uphill battle, but there are things you can do to improve your situation. To help make your goal of purchasing a new home a reality, let’s look at 3 things you should know about buying a house with bad credit in Atlanta.
Research Assistance Programs
Part of buying a house likely means securing financing through a mortgage lender, and this can be complicated by having bad credit.
Before approaching your lender of choice, you’ll want to sit down and go through all of the county, state, and federal programs and credits that could be available to you. The most common programs that you could take advantage of include USDA and VA loans, and contacting your local branch of the Federal Housing Administration is a good place to get information and sort out your options. These two big programs have their individual qualifications, but taking a quick look into what they offer could make a big difference in not only receiving the financing, but your financial shape down the road.
Since your goal is buying a house with bad credit, it’s good to understand that you’re likely to be locked into a higher-than-average interest rate. Despite this unfavorable position, you can certainly overcome this obstacle.
The best way to handle a high-interest rate is clearly understanding the entirety of any mortgage before you sign on the dotted line, as well as cautiously budgeting and saving for your monthly payments. If you are looking to acquire an adjustable-rate mortgage, make absolutely sure that you have done the math for your initial mortgage payments as well as where your payments will be once the teaser interest rate expires and you are paying more each month.
Make Yourself an Outstanding Candidate
After you determine which direction you want to go with your mortgage for buying a house, it’s time to do everything to rehabilitate your credit and make yourself the ideal buyer.
This begins by ordering your free annual credit report and going through it from front to back. You’re going through this report to check its accuracy, to go through official channels to dispute any inaccuracies, and to take an inventory of any outstanding debts.
With this expanded knowledge of what creates your credit history, set up a realistic timeline to save as much money as possible while paying down your debts before buying a house. This will allow you to contribute a greater earnest money payment, put more down at closing, and lower your debt-to-income ratio. All three of these things are going to help you out a ton throughout your journey.toward buying a house.
Be Upfront and Honest
Finally, don’t try hiding your bad credit from lenders or sellers. If either of them discovers you have been disingenuous about your financial circumstances, that’s only going to hurt your chances of closing on your new home and buying a house.
A better way to deal with both parties is to answer any questions they have, openly and honestly, while providing any requested documentation. You can add a flourish to any offers by including a personal letter to the sellers explaining how you have fallen in love with the property and how you’re working to improve your bad credit. In some cases, this personal touch can be the tipping point that influences a seller to choose you over other prospective buyers.
Guidance Dealing with Bad Credit when Buying a House in Atlanta
Having bad credit—whatever the reason—doesn’t automatically mean you can’t find a new home. If you’re looking for help buying a house in Atlanta with bad credit, contact us today at (404) 977-5054!