When you have bad credit, it takes a little more work to buy a house. Before you start looking for a house, you should figure out how much you can pay each month. Check out the real estate market where you want to buy. Find out how much houses are selling for and how much the monthly payments are. Keep in mind that you may end up paying a little more each month than someone with a traditional bank loan. Keep this in mind as you figure out what you can afford...
When you have bad credit, it takes a little more work to buy a house. Before you start looking for a house, you should figure out how much you can pay each month. Check out the real estate market where you want to buy. Find out how much houses are selling for and how much the monthly payments are. Remember that you may end up paying a little more each month than someone with a traditional bank loan. Keep this in mind as you figure out what you can afford.
You will have to put in more effort to find a house you can buy without a loan. You will have to do more shopping. So, pay more attention to what you need in a home than what you want. Make a list of the bare necessities you want in a house. Only write down what you need most. Do you need three bedrooms, or can you get by with fewer? Do you need a garage big enough for two cars, or will a carport do? Is it better for your health to only have one floor? How close does a school have to be?
Write down the things you want on a separate list. Wants might include a pool or hot tub, a walk-in closet, wooden floors, a deck, or a certain style of architecture. It would be nice to find a home that has some of your wants, but you should focus on finding a home that meets your needs first. Most of these things can be added to a home at a later time.
Make a third list of things you absolutely do not want in a home, such as too many stairs, a fixer-upper, a location too close to a freeway or too far from the centre of town.
You might not be able to pick and choose. You might be able to get by for now with a smaller home while you build your credit and build equity in the smaller home. Then you'll be able to trade that house in for one that's bigger.
It's not as hard to get back on your feet financially as it used to be, but you can't do it if you try to buy more house than makes sense. Don't take risks!
