27 Oct 2021

HomeGirls
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Becoming a Homeowner Despite Your Financial History: 5 Essential Tips

You’re tired of renting, and you’ve been daydreaming about buying your first home. But you’ve made some financial mistakes in the past, and now, you’re not sure if you’ll be able to purchase a home. However, buying a home with a rocky financial history could be easier than you think, especially with alternative financing options provided by Home Girls Property Solutions. Here’s how to close on your ideal property, no matter your financial background!

Pay Down Debt

Even if you wish you had made different financial decisions in the past, you can start improving your current financial situation today by paying down your debt. If you’ve only been making minimum payments on your debt, it’s time to start allocating more money towards this goal each month. Go over your budget to figure out which unnecessary expenses you can cut, and consider starting a side hustle to bring in some extra cash. Not only will having a smaller debt burden give you peace of mind, it will also improve your credit score, which can help you qualify for better terms on your loan.

Improve Your Credit

In addition to paying off your debt, there are plenty of other strategies you can use to boost your credit score. And if you stay focused on increasing your score by sticking with these financially savvy habits, you’d be surprised by how much progress you can make in just a few months! If you want to fix your credit score, Nerdwallet recommends disputing any potential credit report errors, using less than 30% of your credit limit on each card, and, of course, paying off your bills on time each month.

Research Types of Mortgages

You do not necessarily need to take out a conventional mortgage. Many people assume that a conventional mortgage is their only option, but in fact, there are a wide variety of mortgage loans that you should research! For instance, Summit-Mortgage states that if you have a shaky financial track record, you may still meet all of the requirements for an FHA loan or a USDA loan. If you’re a veteran, you may be able to use a VA loan. You could also look into buying a home through owner financing.

If you’re not sure what type of mortgage is right for you, it’s a good idea to seek professional advice. You can talk to a housing counselor to get an expert opinion.

Accept a Higher Interest Rate

You can shop around at different mortgage lenders to find out who will offer you the best interest rate. However, keep in mind that your financial history might mean that you will need to pay a higher interest rate. But this doesn’t have to be an obstacle to homeownership. You can accept a loan with a higher interest rate now in order to buy your house and then consider refinancing your mortgage in a few years.

Offer a Larger Down Payment

Your real estate agent can help you find homes within your budget. Overall, it never hurts to offer a bigger down payment if you’re concerned that your financial history might make it more difficult for you to buy a home. A large down payment proves that you’re capable of making and saving money, and it will also create a more enticing offer for a home seller.

If you’ve struggled financially before, don’t assume that homeownership is out of your reach. You may be surprised by the many flexible mortgage options available to homebuyers. With these tips, you’ll be able to secure a loan and get an offer accepted on a home you love!

Having trouble buying a home with a traditional mortgage? Home Girls Property Solutions can help you become a homeowner! Connect with us through the contact form on our website to get started.

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