How to Buy a Home When Your Financial Standing Is Less Than Stellar

Buying a home isn’t easy for anyone. It can be a long, complicated process that requires a lot of time and energy. And when you don’t have the most remarkable financial record, it can seem like an even more daunting task. Maybe you have no credit, poor credit, or simply feel like you don’t make enough money to purchase a home.

Fortunately, you can do things and apply for programs that can help you buy a home. The Dana Olmes & Jeff Biebuyck Group thrives on helping our clients and audience improve their living situations. We’ve listed a few practical suggestions for how to approach the home buying process when you’re not in the best financial position:

Create a monthly budget.

 Knowing how to make and live by a budget is one of the most useful life skills you can have. No matter what situation is under question, budgeting should play a critical role if it has to do with money. So when you’re planning to purchase a home, the first thing you should do is learn how to create a budget.

If you already have a budget, learn how you can modify it to fit your circumstances as a homeowner better. Along with allocating money to your current rent payment, do some research to determine the most you could afford each month for a home. Be sure to include mortgage, utilities, maintenance, and emergency repairs. Then, figure out how you can cut expenses to your budget to make up the difference and leave room for saving. 

Tackle your debt.

We’ll talk about credit in the next section, but the first step toward building your credit and strengthening your position for a home purchase is to start eliminating as much debt as possible. Buying a home is a significant investment. Why would you add a considerable amount of debt to your existing debt? 

Along with tailoring your budget so that you can pay off debts each month, there are plenty of options when it comes to debt relief. Consider hiring a debt relief specialist to walk you through the various solutions and help you determine if one is right for your situation. Your employment status, the amount owed, and your ability to make payments will all be factored in to choose the best way forward.

Build your credit.

Besides knocking out dirt, there are several other ways that you can start raising your credit score today. Getting a secured credit card or a credit-builder loan are good ways to improve  credit. You also want to build your credit history, which you can do by maintaining a credit balance of under 30% on all your accounts and making all your payments on time. 

Look into your mortgage options.

If you fall within the low- to moderate-income bracket, there are options for obtaining a mortgage that requires little to no down payment. For government-backed home loans, lenders can evaluate your credit via nontraditional credit data, which would include your history of paying rent, insurance, utilities, etc. FHA loans, VA loans, and USDA loans are all worth looking into. And you may be able to score a conventional loan without a credit history, so look into getting pre-approval. The best thing you can do is speak with a mortgage lender about your options.

Don’t give up on your dream of purchasing a home just yet. Create a budget that allows you to save money while determining how much house you can afford. Focus on illuminating as much debt as possible and building up your credit. Finally, research the various home loans available, and meet with a lender to figure out the best path forward.

Are you looking to buy or sell a home? Contact the Dana Olmes & Jeff Biebuyck Group today! (747) 888-0508

** Written by Charles Simmons