There is a lot of misinformation online in relation to credit and qualifying for a mortgage. Yes, credit is certainly a factor when determining eligibility, but many people qualify who do not realize they do.

This can be for a number of reasons – if you or your spouse are a veteran, you qualify for a VA loan, which does not have traditional credit underwriting. You might also qualify for a FHA loan, which has very lenient underwriting guidelines. Many borrowers also simply have better credit than they realize.

If you are interested in buying a house with what you think is bad credit, the first thing you should do is have your credit pulled by a qualified mortgage professional. Self monitoring services are nice, and recent credit reports for credit cards or auto loans are a decent comparison, but each type of credit you are looking to get has slightly different guidelines, and as such your credit score will come back differently for each.

After you pull your credit, if you do not qualify for financing, discuss a credit repair program with your lender. You would be surprised how quickly you can repair your credit. I am going to close on a mortgage in the next week for a first time home buyer in Sterling Heights who, in March, could not qualify for a mortgage with any lender. But after we looked over his credit and came up with a plan, his credit improved enough to qualify for a FHA loan. Now, his costs will be higher for the loan, as he is still a higher risk borrower, but it is well worth the price for him to own a home.

If you are worried that your credit might prevent you from purchasing a home, please contact me so that I can help you understand exactly where you stand in relation to buying a home. And if you have anything else to add about buying a house with bad credit, please leave a comment.