Are you trying to purchase a house with bad credit? Do you think it’s impossible? Well, it’s quite possible, only you should know what steps to take. This article will help you avoid ending up paying a lot of extra money in the long run. Also, it’ll help you get easily approved for a bad credit merchant account.
House with Bad Credit + Bad Credit Merchant Account
First of all, let’s start with figuring out what scores are labeled as “low.” In the case of conventional loans, you deal with the most stringent lending standards. This means you’ll be required to have a score of at least 620.
When it comes to FHA (Federal Housing Administration) loans, these are associated with a minimum of 580. Overall, with different lenders, you’ll find different credit score requirements. It all depends on how much risk they’re ready to take on.
By the way, bad credit also creates problems for merchants trying to get approved for business funding. The best way out for bad credit merchants is to apply to a reputable alternative online lender.
Nowadays, many choose alternative business financing over traditional loans since the 1st one is easier, faster, and more hassle free to get. So, a true business funding and payment processing professional in your field can help you get a bad credit merchant account with ease.
The good news is that even if you lack the bare minimum credit score to be eligible for a mortgage, you can use alternative options to buy a house. Here’re some tips to try for purchasing a house with bad credit:
- Make sure to get your credit report. This way, you’ll be able to detect any error on your report and get rid of it to avoid further complications.
- Speak with a housing counselor from a HUD-approved agency. This will help you get a better idea of the home-buying process. Better understanding will help you make better decisions concerning the lending options and closing on a house, etc.
- Find out what you can qualify for with your current credit score. In fact, you can apply for 2 major types of mortgage loans: conventional loans and government-backed loans. The former ones aren’t insured by the federal government, but the latter ones are.
- Save for a down payment. As a result, lenders will see you’re serious about purchasing a house. So, just start saving.
- If you’ve already found a potential lender, but the latter is hesitant to lend you the money, find a co-signer. The main advantage is that the co-signer’s income will play a significant role in determining the amount you can qualify for.
- Start improving your credit. This is always a fine idea if you can wait a couple of more years to purchase a house.
To sum up, if you’ve been told your low credit score won’t let you purchase your dream house, don’t believe it. You’ll face some difficulties, however, bad credit isn’t the end of the world. Just take the right measures to buy a house with bad credit.
Author Bio:As the FAM account executive, Michael Hollis has funded millions by using bad credit merchant account solutions. His experience and extensive knowledge of the industry has made him finance expert at First American Merchant.