If you’ve found your dream Cactus Acres home for sale but aren’t sure if you’ll qualify for a mortgage due to bad credit, put your fears aside. Bad credit doesn’t mean you can’t buy a home but you might end up paying more than someone with good credit. Most likely, you’ll end up with a higher interest rate. But down-the-road, you can always refinance once your credit score gets better. 

Waiting Period After a Bankruptcy

Let’s say your credit is bad due to a foreclosure or bankruptcy. Here’s what the waiting period is before you can get into a Cactus Acres home for sale.

— A bankruptcy filing stays on your credit report for ten years. You still might still be able to qualify for a loan, though. 

— With that said, for better rates with a conforming loan, you’ll need to wait four years after filing bankruptcy or a short sale. FHA guidelines are two years after a foreclosure, three years with bad credit after a short sale. 

— If you don’t want to wait that long to get your Cactus Acres home for sale, you can get a loan within six months after filing bankruptcy from a hard-money lender. But up to a 35 percent down payment might be required with bad credit. You’ll also be paying a much higher interest rate and probably not get loan terms as favorable. 

How to Get a Conforming Loan with Bad Credit

There are mortgage brokers who specialize in helping borrowers get a loan with bad credit. So, that Cactus Acres home for sale might not be too out of reach. 

 — One step you can take in trying to improve your credit is to get a major credit card. Believe it or not, it’s easier than you might think after filing bankruptcy to get one. Basically, filing bankruptcy gives you a fresh start and the lender knows you have no debt. You also can’t file for bankruptcy for another seven years. 

— Getting a loan can also be a little easier if you can show steady employment for one or two years and earn a regular salary (with the exception of self-employment).

— Save at least 10 percent for a down payment. 

— Pay your bills on time. 

Alternative to Bank-Financing for Bad Credit

If you don’t like the rate a conforming lender is offering, another option to getting financing for that Cactus Acres home for sale is through buying the home with seller financing. This offers: 

— No qualifying and lower interest rates

— Flexible terms and down payments

— Fast closing

So, you can see, there are options to getting into a Cactus Acres home for sale with bad credit. Again, you might end up paying more if you don’t want to wait to build your credit back up.