How to Buy a House if You Have a Subpar Financial Record

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Disclaimer: While this article does provide tips and resources for purchasing a home with a subpar financial record, it is not a substitute for sound financial advice. Please seek professional advice before making any important decisions.

Owning a home is still an integral part of the American dream, according to Forbes. If you're among the many people in the United States who want to own a home but don't have a strong financial history, you may assume this goal is beyond your reach. Think again. It is possible to buy a property even if you don't have a flawless record.

The first step to paving your path to property-ownership is to get an idea of approximate costs. The internet is a great place to start; Best Sacramento Homes offers a look at properties in Sacramento, California, for example. Connecting with local realtors like Dan Gossett and his team is also a wonderful way to get expert insights into the market.

 Before you make an offer on your dream house, however, you have to get the money for it. Read on to find out how to buy a home despite a poor financial history.

Take action to improve your financial record

The traditional route to getting a home involves taking out a mortgage. Traditionally, the down payment on the home should be a minimum of 20 percent of the total home price. A mortgage calculator can help you determine how much you need. This will guarantee you more favorable mortgage terms and interest rates. The Mortgage Reports explains that this also eliminates the need for private mortgage insurance.

Note that lenders look at your financial record to see if they want to extend you a loan. Your credit score, also called a FICO score, is one major factor they assess. MyFico explains that the FICO score is calculated based on multiple factors, from accounts owed to new credit and length of credit history. To check your credit score, visit You are legally entitled to one free report per year.

If your credit isn't great, there are steps you can take to improve it and better your odds of getting the loan you need to fund a down payment. First, check for mistakes. CNBC reveals that more than one in five people have an error on their credit report that harms their credit profile. If debts are dragging down your score, check out debt relief. These programs help you find debt solutions based on factors like how much you owe and your job status.

Consider non-traditional sources

If you aren't able to boost your credit sufficiently to secure a favorable loan, there are other options available. Redfin has a quick primer on how to buy a house when you don't have sufficient money for a down payment. They propose out-of-the-box options, such as using Federal Housing & Urban Development loans or looking to rural housing site loans via the U.S. Department of Agriculture.

Consumer Reports offers additional ideas on how you might fund a down payment via alternative methods. Their proposals include crowd-funding, withdrawing Roth IRA savings, or borrowing from your 401(k). You can also ask a trusted friend or family member to co-sign a loan. As Credit Karma explains, this offers advantages and disadvantages. Beware that the co-signer will ultimately be responsible for the loan. That means if you can't pay, they will become liable and their credit rating can take a hit.

As the above guide has hopefully made clear, there are options available to you beyond the traditional mortgage. Remain open to such alternatives and you should be able to find a way to afford a house you love.

If you're looking for a house in the Sacramento area, trust Best Sacramento Homes for help. Take a look at the communities we represent online. When you're ready, reach out and we will be happy to help you find your perfect property.

Written by Charles Simmons of

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