What you Need to Know About Buying a House With Bad Credit But Good Income

Overview

Buying a house can be a great investment aside from just providing shelter. While some people can afford to pay cash upfront when buying a house, most people generally turn to financial institutions for financing needs. Qualifying for a home loan can provide a simple way to get the house of your dreams.

It becomes slightly trickier when you have a bad credit record.

The reasons for your bad credit record may vary, but what remains consistent is the fact that you will be considered to be a high risk individual as a result.

Can you buy a house with bad credit but good income?

It depends on how bad your bad credit record actually is. For instance, if you’ve occasionally paid late you can generally remedy your credit. If there is a bankruptcy on the other hand, it may be more difficult to qualify.

The answer is yes, but you’re likely to pay more than a borrower who has excellent credit.

What are your options when buying a house with bad credit but good income?

You could talk to a lender who specialises in helping borrowers with bad credit to buy a home.

If you show steady employment on the job for one or two years this may also improve your chances. You’ll also need to prove that you earn a regular salary.

A large down payment shows the lender your ability to shoulder the loan, despite your credit history. You may be required to put down 20% to 35% as a deposit.

Monitor your credit score and do what you can to bring it up. Make sure that you settle any outstanding debts you may have and begin rebuilding your credit record. Don’t take on any other loans when buying a house with bad credit but good income. This is a bad reflection on your application and may affect it adversely.