Having bad credit is perceived by many as a major hindrance in buying a foreclosed home. Many are curious about how to buy a foreclosed home with bad credit. Is it possible to do it? Is it difficult to do so? For many people it is difficult, but for some it may be easier than you expected. There are ways where you can make yourself eligible even if you have bad credit. This is something that many are not aware of. Having a bad credit does not mean you can no long buy something foreclosed like a home. You can still buy even with bad credit.
You Can Correct Your Credit Rating First
One step in how to buy a foreclosed home with bad credit, is to correct your credit rating. Some acquire a bad credit rating unintentionally, while others acquire it intentionally. When you apply for something that involves a credit related transaction, your credit standing is usually checked via a credit bureau. If you have bad credit, your application may be put on hold. So you need to correct your credit rating first. If you have an existing debt, then pay it. If there are circumstances then make sure it is explained in your favor. After doing that, then you can file your application.
You Can Apply for New Credit
One other thing that you can do in how to buy a foreclosed home with bad credit, is that you can apply for new credit. While a new application may not carry much weight than an older application, it will still mean something. New credit means that there is no bad credit to talk about. The only drawback can be that the amount of your credit may be lesser. Such a drawback can be solved by other means available. With a new credit, there is no bad credit to talk about when you file an application to buy foreclosed home.
You Can Project the Cash-Basis Transaction
One unlikely method to use in how to buy a foreclosed home with bad credit, it to project to the seller that you do not do credit transaction but only do cash-basis transaction. When you do this, they will not ask for your credit line or credit standing. However, you must be prepared to shell out a bigger amount of down payment than the usual applicant. Those who are into cash transactions may be required a bigger equity if they want to pay the rest of the amount in installments.