How do I buy a home when I have bad credit?

Question

I had to sell my home in GA and relocate to TX due to COVID. My credit dropped dramatically to 500 because we couldn’t make payments. So now we are looking for a home to buy, live in it for a year then rent it out so that we have steady cash flow and be ready if this tragedy ever happens again.

I have money for 20% BUT my credit score is bad, please help how do I get passed this?!

Cassi Justiz · Answer

Unfortunately, most loans will require a minimum credit score in the 600 range. I would go ahead and meet with a lender or two and come up with a game plan. Find a lender that specializes in credit repair. They can usually look at your entire credit picture and give you an action plan with your specific goals/situation in mind.

Lorraine Y. Marquez · Answer

Actually you are right! I thought renting for a year I would lose out on all that rent money but i see it’s worth it.

Thank you 😊

Kyle J. · Answer

Why not rent temporarily while you rebuild your credit?  Nothing wrong with that.  Having your own place for you and your family would probably be a lot less stressful than living with your parents, I'd imagine.

Lorraine Y. Marquez · Answer

Thank you 😊 I’m a little desperate to buy because I am living with my parents and I have 3 kids. Although my husbands income is there the credit score is holding us back.