Does Bad Credit Mean Home ownership In Florida Is Out Of Your Reach?

Florida housing market is an ideal place to make a real-estate investment because demand for Florida homes is never ending. You must be living in Florida for so long, but not necessarily get the title of ‘home ownership.’ This is because the home prices in Florida are much more than any other US state. But with the help of financial institutions lending facilities, one can get the title of ‘home ownership.’

Just like you need a good GPA to get into your dream college, similarly, you need a good credit score to secure a loan for your dream house in Florida.

“Today, bad credit isn’t just based on a number, but the timing of recent derogatory activity like rolling late charges or a recent short sale or foreclosure,” says Joshua Vales, a mortgage loan originator.

Here are four best ways to position your finances and to improve your chances of getting a mortgage loan.

  1. Save enough for down payment

Despite your credit history, a large down payment may signal the lender your ability to pay-off the loan, and lower your LTV ratio. The concept is, the more you invest in down payment, the less risk you pose to your mortgage lender.

  1. Go with an FHA loan

For borrowers with bad credit scores, Vales recommend them to go for Federal Housing Administration (FHA)   loans because the guidelines for these loans are much lenient than Fannie Mae and Freddie Mac loan requirements.

  1. Know what to emphasize to a lender

Apart from using automated systems to determine your eligibility, lenders also go for manual underwriting route. For instance, they would check the sufficiency of your cash reserves, on-time rent payments, etc. A high monthly income could help portray you like a less risky candidate.

  1. If possible, go with a private mortgage

As a general rule, financial institutions are there to provide you loans of different kinds, but if your credit score is too bad to match with the lender’s loan requirements, you may ask your friends, close family members or a private lender to grant you a loan for your dream house in Florida. While there are downsides to this type of private loans, the loan terms will set forth by both parties.

 Bottom line:

Home ownership with poor credit is within your range if you follow the above guidelines. “We never just tell a client who has a goal of home ownership ‘no.’ We may say ‘not yet,’ but that is always followed up with a detailed plan on how to fix [their] credit, save money, and gear up for home ownership,” says Vales.

Pro Tip: For professional counseling on how to buy a home with bad credit in Florida and Connecticut, simply contact United Financial Counselors.