You've searched high and low around town looking for that special home for you and your family. Everyone agrees that "this is one"! Your down payment for home is large enough, but you know your credit is terrible, or worse, practically non-existent.
It is a given that banks tend to lend money to people who a) have enough cash that they don't need a loan; b) possess good to very good credit.
Another nightmare with having bad credit is closing costs. On conventional loans designed for individuals with credit problems, closing costs can be considerably higher. The higher interest rate will also cause monthly payment to increase.
In addition, percentage of down payment needed towards real estate cost will also increase. The required down payment for credit-impaired applicants can easily be 10% to over 20% in some cases.
Based on a $100,000 home, this could easily equal $10,000 to $20,000 in down payment towards real estate cost-not including closing costs.
Some of you reading this might be thinking aloud, "Yeah, that's just how system is, right"? Not much can be done about my bad credit.
Although "system" appears to be working against you, you can still get dream home you desire.
Fortunately, there are little, but very effective techniques being used by people to establish AAA credit, wipe out debts, and proceed to get house they want. All in same time period.