Reality of Realty: Buying a Home with Low Credit - It's Possible!

By: Valerie Davenport

[TRANSCRIPT]

Hey future homeowners, welcome back to my channel, Reality of Realty; I’m Valerie Davenport. And, as your trusted real estate guide, Today, we're tackling a topic that's on the minds of so many aspiring homeowners: buying a house with a not-so-perfect credit score. It can feel like a huge hurdle, but trust me, it's absolutely possible. Stick around, and I'll break down exactly how you can make your homeownership dreams a reality, even with a lower credit score.

So If you like videos like this and other behind the scenes peeks into what it’s like to be a realtor, don’t forget to like, share and subscribe so you’ll be notified when new videos are published.

And,whether you’re moving across the nation or across the street, tap into my resources by emailing me today using the email in the description box below. Now let’s get into the video.

Hey everyone, welcome back to my channel! 

First things first, let's talk about your credit report. Head over to AnnualCreditReport.com and grab a free copy. Seriously, this is the crucial first step. You need to know what's on there, and more importantly, if there are any errors. Mistakes happen, and disputing them can make a real difference.

Next up: improving that score. This is a marathon, not a sprint, but every little bit helps. Focus on paying down those credit card balances, especially the high-interest ones. Think of it like climbing a mountain – every step gets you closer to the top. Set up automatic payments so you never miss a due date. And try to resist the urge to apply for new credit cards. Each application can ding your score a little. But, here’s a helpful tip I learned during my time opening retail credit cards: for every 3 on-time payments, your score improves a couple points so remember the rule of 3.

Host (voiceover): Now, let's talk loan options. This is where things get interesting. Some loans have a lenient credit score requirement as low as 680 for some. You've got FHA loans, backed by the government, which are often more forgiving on credit scores. Then there are USDA loans for rural areas, and VA loans for our veterans and active military – both with potential advantages for those with lower credit. And don't forget about the possibility of a co-signer. If you have someone with great credit who trusts you, this could be a game-changer.

Beyond your credit score, lenders also look at your overall financial picture. Increasing your income, even with a side hustle, can make a big difference. Saving for a larger down payment can also offset a lower credit score. Think of it as showing the lender you're serious and responsible. A stable job history and consistent rent payments are also important.

Here's my biggest piece of advice: talk to a mortgage specialist. Find someone who specializes in working with people in your situation. I’m happy to recommend you to someone if you need that resource. The reason this is so helpful is because they will run your credit for a pre-approval. Now this does count as a hit against your credit but the benefits outweigh the negatives because They can find the best loan options for you and present them to you to make a decision. They can advise what to do to improve a couple more points, or suggest what to pay off for other improvements. They will seek other programs you might qualify for whether it’s down payment assistance or other services. Getting pre-approved is so key because you can start the home search while also making improvements to your credit. It shows sellers you're a serious buyer once you know your buying power. 

Buying a home with a lower credit score might require a little more work, but it's absolutely within reach. Be patient, be persistent, and don't give up on your dream.

I'm here to help! If you haven’t received my quarterly vendor list, please email me using my email in the description box below. I have some great resources and some mortgage specialists I recommend. If you have any questions, leave them in the comments. And don't forget to like and subscribe for more home buying tips!

So that’s it for today’s video. I’ll wrap it up here by saying thanks for tuning in to the very end! If you found this info helpful, don't forget to like, share and subscribe, and hit that notification bell for more real estate insights. Until next time, happy house hunting!