One question commonly asked is if you can get a house with bad credit. While the average score is 669-699 depending on which credit report does get used, the numbers still steadily rise, and a lot of people have less than 600. this means that many are unable to obtain a mortgage, which makes buying a house or any investing a task. So can you? Yes, you can do it, but it’s best if you don’t’ do it right away.
Bad credit happens because of medical bills, or identity theft, or maybe the person lost their job and had to miss payments. The recession in 2007 left millions in this position, but some are caused by stupidity, especially with credit cards. Lots of times, people obsess over luxuries and have caused many people to lose good credit and wind up in bad spots. If you’re in the poor range, you should look to see if it’s a symptom of a bigger issue. If it’s a symptom of selfishness, greed, impatience, or other bad habits, it’s definitely something to watch and look into. If it was suddenly boosted way more with paying off debts, sometimes these same people fall into debt, so you need to look at how you handle money, and if you can’t, investing is probably not for you.
There are loans you can get, with some of the credit scores being about 580 or higher, but you may need to pay a bit more on the downpayment.
If you’re still wanting to do this with bad credit and know how to manage this, first you can try partnerships, which help to fill the void. It helps benefit others in a mutual sense. However, be careful, since the wrong person can ruin you.
Seller financing is another option. This is where the seller finances the property, rather than making you get a loan. They allow you to make monthly payments until it’s paid off, or the terms of the loan ends. Sellers will not ask for a credit score, but it can be used to own the property free and clear, without a mortgage. It’s a win-win for everyone.
You should also look at hard money lenders, which are those that lend money at higher interest rates. They can be high, with less than two year terms, and they charge large fees, but they’re great for flippers that want to get in and out of it, and they don’t look at credit scores.
Private money lenders are another. They are not pros, but rather they want to diversify their loans, and it can be pretty much anyone. You need a relationship though.
Finally, consider wholesaling, which is finding deals, putting them under a contract, then flipping to a higher amount, without using their own money. But, it is a job, and it’s hard.
It is possible to finance a place without credit, but it definitely is not the ideal path for you.