Whenever you want to buy a house on mortgage, your credit is one of the first things your lender will check. This makes some people apprehensive about starting the home purchase process if they don't have stellar credit. Fortunately, it doesn't have to be so; here are a few things you can do to buy a house with less-than-stellar credit:
Explain Your Low Credit Score
Lending is a judgment call that financial institutions make based on a variety of factors. If you can get your potential lenders to listen to you, you can convince them of your ability to repay your loan by explaining why you have a low credit rating. Of course, this will only work in your favor if your explanation makes sense to the lender. For example, if you didn't pay an emergency medical bill on time and your credit score tanked, explain that to a lender, and you might still walk away with a mortgage.
Consult Those Who Assist Bad-Credit Borrowers
Several organizations are dedicated to helping homebuyers with bad credit. A classic example is the Federal Housing Administration (FHA), a government agency that may guarantee your loan if your credit is nothing to write home about. Another example is Veteran Affairs (VA) that only caters to military (current and former) personnel. Research such organizations, and you may be lucky enough to find one that caters to your demographic.
Get a Cosigner With Perfect Credit
Getting a cosigner shouldn't be your first option; you should be able to buy a property without making other people liable for your loans. However, if that the only way you can buy a house, look for a close family member or friend with stellar credit. Using a cosigner reassures the lender that their investment is safe even if you (the primary borrower) experience a financial hiccup. However, you still need to be sure to buy a house whose mortgages you can afford so that you don't inconvenience the cosigner.
Emphasize Your High Income
If your credit is bad, but you have a high income, you may have better luck by emphasizing your high income. Lenders evaluate borrower's credit scores to confirm that the borrowers can repay their home loans. Your high income isn't an exact replacement for a high credit score, but it plays some part in confirming to the lender that you intend to settle your debts.
Therefore, don't assume you can't buy a house just because your credit score isn't perfect. Property agents have probably dealt with people like you; consult one for advice on how to proceed.