Everyone will have a dream about buying a home for them. But not all can afford to buy the come they are dreaming. There are lots of factors which will affect the decision of buying the home. Main and the most important aspect is the cost of buying the home of their dream. Buying home of any size be it small or big is always high. Real estate across the world is pretty rich business and the prices of the homes are pretty high always and seem to never come down at any time.
Buying home with low credit score
When one decided to buy a home, he should have enough money on hand or in bank otherwise he should have to get a loan from banks to buy the home. Getting loan from banks or any financial institution is not an easy task. Documentation work for getting the loan is pretty tough and tiresome job. First thing they will check is the credit score. If your credit score is low for some reason, getting loans from the bank will be pretty tough.
When the credit score is low, no one will be ready to lend the money against the home. All the institutions across the world trust credit score as the benchmark for providing loans. But there are other alternatives if your credit score is very low. There is Federal housing administration provides loan even if you have low credit score. However there is a condition that you need to pay down payment in order to get the loan. Down payment amount will vary based on your credit score. If you have credit score above 518, you have to pay 3.5% of the loan amount upfront as down payment and 10 % if it is between 500 and 580.
According to FHA, even if the buyer does not have any credit history he should not be denied loan due to that. You can click to read further about the FHA and other guidelines. One easy way to qualify for the home loan is making huge down payment. Irrespective of your credit score, bankers will like to have good amount initially as the down payment. Other option is to have a co-signer for the mortgage which will help you to qualify for the home loan. But you should explain the co-signer that, if you fail to make the payment it will affect him also. Also he will be affected even if you go for a foreclosure of the loan. He should understand the risks involved in signing as co-signer. Another alternative is to get the amount from the friend or relative. In this method, if you are not able to make the payment, there will be broke off relations and some time court cases also.