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We would all like to think that homeownership is still a realistic part of the American Dream, the biggest purchase most consumers will make in their lives.<\/p>\n
And with housing prices continuing to skyrocket in many regions of the United States, getting into the market and being able to enjoy some of the equity offered by appreciation of real estate values is certainly a solid investment.<\/p>\n
But home loans are not as easy to obtain as they were a decade ago. Still, if you\u2019re tired of seeing so much money disappear each month as a renter, it\u2019s still possible to buy a house with bad credit<\/a>, and get in on the benefits of home ownership.<\/p>\n Here are a few ideas on how to maximize on the resources you have and address some of the new financial avenues available to those with less-than-stellar credit, besides a trip to the local bank.<\/p>\n Faced with fines and massive losses during last decade\u2019s mortgage market meltdown, traditional banks learned their lesson have become much more stringent in their rules and processes for loan approvals. They\u2019ve also significantly backed away from the business, especially when it comes to first-time mortgage applicants or those with credit challenges.<\/p>\n In their place, almost 50 percent of home loans in the U.S. are serviced by what are considered \u201calternative lenders<\/a>\u201d \u2013 credit unions and even e-commerce companies who may be better-equipped to work with those with credit issues than the big banks.<\/p>\n Non-bank lenders, frequently smaller operations which may only serve your local community, have begun to provide the opportunities for first-time homeowners that banks used to provide.<\/p>\n Do some research and you\u2019ll find smaller lenders who are more interested in helping with FHA loans or working with you, despite your lower credit score \u2013 there are still a variety of federal programs available to help individuals in your situation, though banks are now more reluctant to address that category of consumers. A small, local company can often be the key to a mortgage deal, especially if you can meet and work with them in person.<\/p>\n You may also have a better chance when working with an online mortgage originator such as Quicken Loans, which is now one of the most significant providers of home loans in the United States. Their web-based technology also makes the process simpler to navigate, with results generated in under 10 minutes \u2013 providing a little more immediacy and clarity to those who\u2019ve submitted applications but are fully aware of their credit limitations.<\/p>\n Other online lenders, including Lenda and Loan Depot, are also starting to provide mortgage-origination help across the entire country, and may again be more sympathetic to applicants with below-average credit. And credit unions are also playing a bigger role in offering mortgages, so consider their options, if you\u2019re already a member, or if you have a number of credit unions in your community.<\/p>\n Partly the result of the troubles stemming from the 2008 financial crisis and the subprime lending disaster \u2013 but also a reflection of the changing role of technology \u2013 the internet is now filled with dozens of businesses<\/a> that provide a marketplace for various housing lenders.<\/p>\n Companies such as Zillow, LendingTree or eLoan serve as the access point between you and a range of mortgage providers. Go through their application process and they\u2019ll be able to provide you with a range of lenders who may be able to work with credit-challenged individuals, with competitive rates and a variety of programs you might not find by simply searching online yourself.<\/p>\n Some even offer advisors who will work directly with you to better understand the roots of your credit issues and your current financial assets, and can often be more helpful than a flat-out refusal from more mainstream lenders or banks.<\/p>\n Even if you\u2019ve been turned down before or faced exorbitant interest rates with other lenders as a result of your credit, the field of competitors you\u2019ll find on one of these marketplace\u2019s sites may provide a more hopeful option.<\/p>\n Some housing communities or even individual landlords may be open to the concept of lease-to-own, which allows you to convert some of the equity from your past monthly payments into a genuine mortgage. If they\u2019re directly familiar with your history and reliability as a tenant, they may also be more willing to assist you in the home loan process.<\/p>\n New rules requiring larger down payments for home purchases have made it more difficult for first-time homeowners to even get into the game, so now may be the time to have a conversation with family members who might be able to loan (or even gift) the money required to get your foot in the door.<\/p>\n Alternatively, you could consider your employer-sponsored retirement account as a potential source of funding for a mortgage, which might help boost your status with a lender. The Roth IRA has a specific rule which allows up to $10,000 to be withdrawn to help purchase a home<\/a>, and the money will certainly help make your case that you\u2019re serious about your plans for a home purchase \u2013 and your aspirations to improve your credit.<\/p>\n Ultimately, your credit history is still going to play a huge role in the kind of housing loan you\u2019ll receive, and if you\u2019re impacted by past credit problems, sometimes it helps to be honest. A personal letter to a local lender may help explain some of the issues related to your low credit score \u2013 you lost a job and weren\u2019t able to make payments on time, or financial problems developed as a result of an illness or a death in the family. Those details may provide a sympathetic lender with a better understanding of your situation, and your on-going stability.<\/p>\n If you\u2019d also like some professional assistance to rebuild your credit score<\/a>, we can help.<\/p>\n You can carry on the conversation on our social media platforms. Like and follow us on Facebook<\/a> and leave us a tweet on Twitter<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" We would all like to think that homeownership is still a realistic part of the American Dream, the biggest purchase most consumers will make in their lives. And with housing prices continuing to skyrocket in many regions of the United States, getting into the market and being able to enjoy some of the equity offered […]<\/p>\n","protected":false},"author":35,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[89,340,78],"yoast_head":"\nConsider Alternative Lenders<\/strong><\/h2>\n
Check Out the Mortgage Marketplace<\/strong><\/h2>\n
Leasing, Loans, and Gifts<\/strong><\/h2>\n
Make the Best of What You Have<\/strong><\/h2>\n