Most traditional mortgage lenders will expect you to have a lengthy credit history of at least fair credit before offering you a home loan. If you do not have any credit history or if your history is poor, you will have a difficult time getting a home loan. Luckily, there are ways around the norm when it comes to credit history. For those who are determined to get a mortgage, there are some crafty ways to get around needing good credit to purchase your own home, such as:
Buy the land, then borrow against the land
In many cases, vacant land can cost a fraction of the amount that a home loan will. Find a vacant lot that you would like to build your home site and save up to purchase the amount necessary for the land. Once you own the land free and clear, you can approach the bank to take out a collateral loan in order to build your own home or purchase a manufactured home to sit on the land. Though the loan may have a higher interest rate, the collateral will offer you a chance to secure money despite your credit.
Find builders with lenders
Sometimes home builders, both traditional home builders and manufactured home builders, will offer their own financing. These financers will have much more leeway on whether or not they approve each person for a loan. This means that if you have some bad credit or no credit at all, they can take a look at your overall situation and still get you approved for a loan. Check with the financing company of some builders who have homes going up in the area or with manufacturers to determine what you need to qualify for one of their homes.
Take a loan against your other assets
Most people do not think about the assets that they have in their favor when it comes to getting a home. Many different people will have assets that can help when it comes to taking out a loan. For instance, you can take out a loan against your 401k or IRA for tens of thousands of dollars for a home purchase. You can also take out loans against other collateral such as a nice car or fine jewelry. If you own your own business, you may be able to sell shares of your company or offer a partnership with your company for a cost. Several assets combined can help you come up with the amount of money that you need for a home with no or little credit.
Contact a company like SWE Homes for more information and assistance.