You Can Buy a House With Bad Credit If You Follow These Three Easy Steps

The economy is still in a topsy turvy mode and more Americans than ever are concerned about buying a home with bad credit after coming through the economic fallout aftermath. Many believe, (and falsely I might add) that their dream of owning a home won’t happen because they have bad credit, I’ve got some good news for you; even if you have a bankruptcy, foreclosure, repossession or otherwise slapped with bad credit, you can still own a home!

Someone once said, “Where there is a will there is a way.” When it comes to the American dream of owning a home, most Americans believe that dream will evade them once they end up in a situation with bad credit. If you have experienced a foreclosure, repossession, bankruptcy or some other situation that has brought your credit score to 620 lower, you can still buy a home. Let’s examine the three steps you are going to have to take in order to land your dream home with bad credit.

Buy a House With Bad Credit Step #1 – Think outside of the box – Most people, when they think about buying a home, the first thing that comes to their mind is filling out a mortgage loan application and crossing their fingers waiting to find out if they are declined or approved. That system has been so ingrained in the American psyche, that the average home buyer has no knowledge of the other methods of buying a home. Consequently, if they ever experience an economic bump in the road it’s as almost if their dream of owning a home is forever washed out.

Let’s face it, in our society things happen! Companies go bankrupt, companies go out of business, we have hurricane Katrina’s, people lose it all to con artists like Bernie Madoff, people are overcome with medical bills and the list of things that can happen goes on and on. To put it succinctly, bad things happen to good people; when they do should these good people give up their dreams of owning a home? A millions times, “NO!”

The first step to buying a home when your credit score is not up to par, is thinking outside of the box. That simply means coming to the realization that applying for a mortgage is not the only path to buying a home. As soon as you grasp that fact, you will be well on your way into realizing your dream. Actually, the other home buying options are less expensive and involve fewer hassles than going the mortgage loan application route. That brings me to step number two.

Buy a House With Bad Credit Step #2 – Know and Examine All of Your Home Buying Options – Now that you’re thinking outside of the box, let’s take a look at some of the more common ways people have been buying homes when their credit score is shredded to pieces. There is: rent to own, rent with an option to buy, lease to own, lease with an option to buy, private owner financing and of course bad credit financing. With the exception of bad credit financing, all of the other options afford you the opportunity of dealing directly with the owner of the property.

That means you eliminate loan processors, credit scores and loan approval committees. It also means you can get a yea or nay right then and in there. So in essence you accomplish the same result without going through the hassle of putting in a loan application and going through that entire time consuming process. And just to be clear, these options are not just for people with credit issues. People with great credit buy homes through private investors and private lenders every day!

Another key issue you need to be made aware of is that there is a mass number of homes on the market being sold through these secondary options. Plus, even if a homeowner has a house for sale and is requesting that the potential home buyer qualifies for a conventional loan doesn’t that they won’t accept an offer to do private financing. The key is, you won’t know unless you put an offer in! REMEMBER: always think outside of the box!

Buy a House With Bad Credit Step #3 – Start Working On Your Improving Your Credit Score – Whichever alternative home buying option you decide to take, it is vitally important that you work towards improving your credit score. I say that because your credit score impacts you in virtually every facet of life. In some states, banks won’t allow you to open up a checking account if your credit score doesn’t meet certain parameters. By addressing the issue now, you can move towards having a respectable score and potentially negotiate a better rate with your improved credit score. If you take those three steps, buying a home with bad credit will be cinch!

House Passes Financial Reform Bill

On December 11th, 2009 the U.S. House of Representatives passed legislation could rewrite the rules governing financial markets and dramatically curtail the power of the Federal Reserve. If enacted, this proposed legislation would bring about the biggest changes to our financial system since the Great Depression.

The 1,279 page bill would create the Consumer Financial Protection Agency (CFPA) to oversee consumer protection initiatives. This agency would be given the responsibility of monitoring many of the financial products available directly to consumers including most loans and credit cards. The agency would also tackle consumer awareness, financial literacy education and credit card dispute arbitration. However, due to amendments added to facilitate the bill’s passage, financing from automobile dealers and credit-related insurance products would fall outside the CFPA’s jurisdiction.

The proposed legislation will also set up a Financial Services Oversight Council to monitor large-scale financial risks, initiate regulation of the vast derivatives market and monitor institutions considered “too big to fail”. This council will be comprised of the Treasury Secretary, the Federal Reserve Chairman and heads of various financial regulatory agencies. This group’s primary responsibility will be to monitor the nation’s financial markets for potential threats and to identify firms and activities where additional regulations should be adopted. Most importantly, the bill also gives the council the power to dismantle large, troubled firms whose collapse could endanger the entire financial system.

Passing the U.S. House of Representatives by a vote of 223-202 with no Republican votes and 27 democrats opposed, the bill must overcome many hurdles before being signed into law. Republican leaders argue that the regulations institutionalize bailouts and hinder business practices due to an overreaching of government powers and the weight of additional bureaucracy. They also feel that the current legislation will not resolve many of the problems that led to the current financial crisis.

Before this new legislation can become a reality it will have to undergo rigorous scrutiny within the Senate. In fact the Senate Banking Committee is now considering a bill that is considerably different than the House version and the Obama administration’s original vision. The bill would completely revamp the existing regulatory structure and create entirely new regulatory agencies with unprecedented powers.

If the Senate legislation should survive a final vote (expected in the first quarter of 2010), the two proposals would need to be reconciled, again creating the possibility for additions, cuts and a host of other last-minute wrangling. It is likely that the final version of financial reform legislation will look very different from the current proposals.