A One-Year Plan to Purchase a Home If You Have No Credit
Posted on: 30 September 2016
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Being bound to your credit score may make it feel challenging to actually get the things you need in life. If you're seeking a new home, then you know how important your credit score is for getting approved for home loans and mortgages. Sometimes having little to no credit history may be worse than just having a low credit score. While home loans may not come instantaneously, you can help speed up the approval process by setting up a one-year plan that has realistic goals and special lending features to ensure that you get approved. Follow this plan based on your budget and current financial situation.
Saving Money
The bigger the down payment you have, the easier it will be to get approved and own the house of your dreams. This may be one of the hardest parts of the process, but saving every extra dollar that you can will go a long way toward providing you with the money that you need to purchase a home. The key to saving money is not just finding ways to make more money. Saving money is about cutting out extra expenses that you have. Take extra time to shop for different grocery sales, budget your weekly food spending, and eliminate any extra purchases that you do not need.
Getting Secured Credit Cards
Even just raising your credit score a little bit can make a difference on the ability to get approved for a home loan. The easiest way to start this process is with a secured credit card. These cards are made available by placing a deposit down for the amount of credit on the card. For example, if you place a $200 deposit down on a secured credit card, then you will receive a credit line of $200. Once you cancel the card, you will receive your initial $200 deposit back.These cards are reported like regular credit cards to the various bureaus and allow you to raise your credit score dramatically within just a single year.
Filling Out FHA Loan Applications
If you're a first-time home buyer, then you may be able to get a home mortgage with a short credit history or low credit score. An FHA loan is a specific type of mortgage that is catered to first-time buyers. You can get a home with a low score and small down payment. As you save up money and build up your credit score, you will be able to get better rates on your FHA loan. A real-estate agent can help guide you through the FHA loan process and help you get approved for the home.
A new home will not magically appear in front of you, but the process can be made a lot easier with some focus and careful planning. Talk to a company such as SWE Homes for more ideas.