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Poor Credit, Not Much Money, What To Do?

08 Oct

I am navigating the wonderful world of poor credit and not much money saved.  Unfortunately this is a common theme these days.  Trust me, I can relate.  I have been working with a few potential buyers who have life experiences that have created situations where there is a bit of panic trying to find a home.

What do you do when you don’t think you have enough money for a down payment?  What do you do when your credit isn’t the best?  These are questions I needed answers to so that I could help some customers desperate for a home and scared they might not qualify.

Let’s start with not much money saved.  The best advice I’ve gotten was to consider a FHA loan as an option.  In this situation you only need 3% down.  All though this is a common belief, you do not need to be a first time home buyer.  With homes selling at such affordable prices, if you can swing 3%, now is a great time to buy.

So your other concern is credit.  Credit reports are needed when renting or buying a home.  When renting a home, this has been a big sticking point.  Most people who need to rent right now have lousy credit.  It is the primary reason they are not buying a home.  I have clients who have panicked over the credit report.  Here is what you can do in a situation like this.

1.  Offer more than the asking price for the monthly rent.

2.  Write a letter explaining why your credit is in bad shape.

3.  Show a record of timely payments from the place you currently live.

4.  Basically put together a resume’ of why you would be an ideal candidate to rent the home.

Remember that these are individuals renting their own home.  They tend to be more forgiving than the banks.  Many times they understand credit issues because they are having the same problems.  That being said, if one person isn’t interested in renting to you, there will be another person out there who is.

Having this additional information will hopefully make the process of finding a home to rent or buy in not the best of circumstances more bearable.

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