Many variables come into play when you decide to purchase a house. You may save for a while toward a downpayment and determine what kind of mortgage payment would work best for your budget. But is your credit situation holding you back? Buying a home with less than stellar credit is possible. Here are five steps to consider:

Know your credit score.
No matter what you think your credit situation is, knowing your credit score serves as a good starting point when beginning your home search. You’ll be able to see if you need to improve your situation before applying for a home loan, plus it will help you determine if you are getting a fair shake from lenders.

Find a San Antonio Realtor.
A San Antonio Realtor can help you overcome credit challenges. Interview several Realtors before choosing one, ask for referrals and call them. I have a long list of great referrals that I’d love for you to contact and who would be happy to chat with you. I want you to be confident when you work with me and know that I am here to serve your needs.

Explain your credit situation.
Let’s sit down and draft a thorough letter explaining your credit situation. If you have poor credit, your lender may ask you for an explanation. If your letter simply states that you couldn’t afford payments, you are more likely to have your loan application denied. But if there were extenuating circumstances that contributed to your financial situation, include those in your letter. Some lenders will consider one-time occurrences as acceptable reasons for inadequate credit, including a divorce or medical emergency.

There are two important items to include in your letter to the lender: the reason for your credit situation and why your days of poor credit are behind you. Convince the lender that the circumstances surrounding your impaired credit score are in the past. In addition, you should write a paragraph highlighting anything that may help the lender see you as a desirable client, including low debt-to-income ratio (particularly good if you filed bankruptcy), a big downpayment or job stability.

Talk to a lender.
I can connect you with wonderful mortgage brokers and direct lenders who would be happy to help you. If you are credit challenged, you may find that working with a broker is your best option. Brokers work with multiple lenders and loan products, giving you a greater chance of success. You may have to talk to a number of brokers or lenders before you find one willing to take on a riskier loan.

If you have a low credit score, some lenders will require a higher downpayment. If you don’t have money for a downpayment, let’s discuss what closing-cost and down payment-assistance programs you might qualify for.

Be prepared for some rejections.
If your credit score is very low and no lenders seem interested, you will likely need to spend the next year or so boosting your creditworthiness. The sooner we get started, the sooner you’ll be on your way to home ownership. I’d love to help!

Pictured above: 6 Mallory Lane is a newly remodeled Tudor style home on a spacious corner lot in the Dominion Estates. Garage with epoxy coating, space for four cars, workshop, 815 sq. ft. of additional living space and bathroom above. House offers updated kitchen, marble flooring, split levels of first floor, renovated pool, full bath, spacious utility room with updated washer/dryer included. New interior cabinetry and paint throughout. Split level master suite downstairs with private side patio. Golf cart access to course. Listed by my Nix Realty Company colleague Suzanne Simpson. Let’s go see it!

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