How To Buy A Home in Knoxville Even if You Have Bad Credit
A lot of people think that buying a home is impossible if they have bad credit. Although having bad credit makes buying a Knoxville home a little tougher, it’s not impossible. By understanding the loan process, such as what lenders look for and creative financing options that are available, you can drastically increase your chances of successfully buying a house in Knoxville.
Before Looking at Homes For Sale in Knoxville:
1. Understand the Loan Process. The first step is to understand the loan process. In order to get a loan with bad credit, it’s slightly more complicated than just walking into a lender’s office. Often times you’ll have to do a little bit more preparation.
Also, if you’re willing to wait a few months, it helps to spend a little bit of time improving your credit before applying for your loan. You can do this by balancing your credit cards so your utilization rate is no higher than 30% on all your credit cards, by not applying for new credit cards for 6-12 months, etc.
2. Know What Lenders Look For. Your credit score isn’t the only thing lenders look at. Although your credit score is important it’s just one of the factors.
Your income, employment history, debt to income ratio all go into the lender’s decision making process. However, not all lenders have the same level of strictness when approving a loan.
Even in a bad economy, there are sub-prime lenders. You can definitely expect to pay higher interest rates, but you can still refinance later once you’ve improved your credit rating through consistent payments.
3. Understand Creative Financing. If you truly cannot qualify for a loan through traditional means due to bad credit, you might want to look into creative financing alternatives. Even in Knoxville, you can often arrange for creative financing options for a home purchase despite having bad credit.
You may be able to get the seller to accept owner financing. You might also consider a 2 year lease with an option to purchase. This gives you 2 years of “owning” your home, giving you time to improve your credit score. At the end of the 2 years, you can then apply for a loan and buy your home for real.
There are many different creative financing options you can look into.
If you understand the loan process and understand what lenders are looking for and can learn how to find creative financing deals, you too can own a Knoxville home, despite having bad credit.
There is a lot of free real estate information available to you about buying, selling or investing in the Knoxville market area. For complete information about the Knoxville real estate market including current Knoxville homes for sale, property values and more, please visit the Knoxville Homes Web site @ www.davidhamilton.com. Feel free to call with any of your real estate related questions and I will be more than glad to answer your questions. David Hamilton may be reached by cell at 865-310-0636 or 865-690-1300 at the office.
David Hamilton
Ferguson Realtors
865-310-0636 Cell
865-690-1300 Office
800-747-0713 Toll-Free