Those borrowers with bad credit are often left with little or no choice when it comes to financing a home. First of all, there are many obstacles to overcome in addition to a derogatory credit score, the biggest of which may be coming up with a down payment for your home purchase. Let us take a look at the two routes that you can take to become a homeowner with bad credit.
Option One: Improve Your Credit First
The first option that makes obvious sense for bad credit borrowers is to improve their credit score prior to applying for their home loan. Most mortgage brokers look for credit scores that are 620 or above in order to finance your home in the traditional manner. If you do not know your credit score, it is a good first step to pull your credit report and score from all three major credit reporting bureaus in the United States (Experian, Trans Union, and Equifax), and see how each bureau ranks your score. This gives you the best information to use going forward as you improve your credit.