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5 Ways To Buy A Home With Bad Credit

Luckily, there are numerous paths you can take to become a homeowner.

Finance

If you're looking to buy a home but fear that you won't be able to due to bad credit, you aren't alone. While the question might be, "Can I buy a home with bad credit?", you might be surprised to learn that the answer isn't as implausible as you might think. The average credit score for home buyers in America is at a staggering high of 731, but most home buyers can qualify for conventional loans with a credit score of at least 620. If your credit score falls below 620 or you lack a credit history all hope for owning a home is not lost.

Luckily, there are numerous paths you can take to become a homeowner.

1. Delay Homeownership To Repair Your Credit

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Repairing your credit score is easier said than done, but if you're not in a race to own a home this might be your best option. If you're aiming to apply for a conventional loan, then reaching a FICO credit score above 620 should be a priority. The higher your credit score, the more likely creditors will extend credit and you'll face lower interest rates. Review your full credit report, dispute any errors, and make plans to make on-time payments for existing debt. If you're feeling overwhelmed, consider hiring a credit counselor who's experienced with repairing credit.

2. Accept High-Interest Rates

If you have bad credit, accepting a high mortgage interest rate is a possible solution for your homeownership woes, but it may come to haunt you in the future. Mortgage lenders consider your credit score when deciding you qualify for a loan and determining your interest rates. A high credit score signifies to credit lenders that you're less likely to default on your mortgage loan, so they provide lower interest rates. When your credit score is low, lenders perceive lending to you as a risk and require a high interest rate to offset the extra risk they're taking on. In the long-term, these higher interest rates can lead to you paying thousands of dollars more in mortgage payments than if you had a low interest rate.

3. Save For A Large Down Payment

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When you make a down payment on a house, that means you are paying a lump sum amount upfront to purchase a house. A down payment is usually expressed as a percentage of the full price of the house, and the minimum down payment varies depending on the lender and personal credit history. But, choosing to pay a downpayment of 20% can improve your odds at qualifying for a decent mortgage rate from a conventional lender, despite having bad credit.

4. Consider An FHA Loan

FHA loans are insured by the Federal Housing Administration and protect lenders from defaults on payments. This protection makes it easier to meet lender qualifications and results in lenders providing lower interest rates. This is a perfect option for borrowers who have a credit score of at least 580. To qualify for FHA loans, there is a typical requirement of a minimum of 3.5%. A great part about an FHA loan is the ability to still qualify for a loan despite a history of bankruptcy or other financial problems.

If you're thinking about applying for an FHA loan, it's good to know that they're available with 30-year or 15-year terms. Pretty much, you're estimated to pay off your loan within 30 or 15 years with regular payments depending on the loan term you choose. Also, you have the option to receive fixed or adjustable rates on your loan.

5. Take Advantage Of Seller Financing

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Taking advantage of seller financing is a phenomenal option for someone with lackluster credit because it doesn't involve a bank. The seller and buyer make the payment arrangement between themselves and the seller finances the purchase for the buyer. When purchasing a home through seller financing, it's important to hire professionals to draw up a promissory note and contract stating the interest rates, payment schedule, and payment default consequences. This method of financing doesn't involve a transfer of principal from buyer to seller, but it's an agreement that the buyer will pay a sum of money over an agreed-upon period.

For some people, the purchase of a house might be the biggest purchase they'll ever make. Owning a house is seen as a sign of financial stability and it's associated with the "American Dream" causing people to hastily buy a house. People may rush into buying a house, but it's still a major commitment that shouldn't be taken lightly, regardless of your credit history.

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ACLU By ACLUSponsored

Over the past four years, we grew accustomed to a regular barrage of blatant, segregationist-style racism from the White House. Donald Trump tweeted that “the Squad," four Democratic Congresswomen who are Black, Latinx, and South Asian, should “go back" to the “corrupt" countries they came from; that same year, he called Elizabeth Warren “Pocahontas," mocking her belief that she might be descended from Native American ancestors.

But as outrageous as the racist comments Trump regularly spewed were, the racially unjust governmental actions his administration took and, in the case of COVID-19, didn't take, impacted millions more — especially Black and Brown people.

To begin to heal and move toward real racial justice, we must address not only the harms of the past four years, but also the harms tracing back to this country's origins. Racism has played an active role in the creation of our systems of education, health care, ownership, and employment, and virtually every other facet of life since this nation's founding.

Our history has shown us that it's not enough to take racist policies off the books if we are going to achieve true justice. Those past policies have structured our society and created deeply-rooted patterns and practices that can only be disrupted and reformed with new policies of similar strength and efficacy. In short, a systemic problem requires a systemic solution. To combat systemic racism, we must pursue systemic equality.

What is Systemic Racism?

A system is a collection of elements that are organized for a common purpose. Racism in America is a system that combines economic, political, and social components. That system specifically disempowers and disenfranchises Black people, while maintaining and expanding implicit and explicit advantages for white people, leading to better opportunities in jobs, education, and housing, and discrimination in the criminal legal system. For example, the country's voting systems empower white voters at the expense of voters of color, resulting in an unequal system of governance in which those communities have little voice and representation, even in policies that directly impact them.

Systemic Equality is a Systemic Solution

In the years ahead, the ACLU will pursue administrative and legislative campaigns targeting the Biden-Harris administration and Congress. We will leverage legal advocacy to dismantle systemic barriers, and will work with our affiliates to change policies nearer to the communities most harmed by these legacies. The goal is to build a nation where every person can achieve their highest potential, unhampered by structural and institutional racism.

To begin, in 2021, we believe the Biden administration and Congress should take the following crucial steps to advance systemic equality:

Voting Rights

The administration must issue an executive order creating a Justice Department lead staff position on voting rights violations in every U.S. Attorney office. We are seeing a flood of unlawful restrictions on voting across the country, and at every level of state and local government. This nationwide problem requires nationwide investigatory and enforcement resources. Even if it requires new training and approval protocols, a new voting rights enforcement program with the participation of all 93 U.S. Attorney offices is the best way to help ensure nationwide enforcement of voting rights laws.

These assistant U.S. attorneys should begin by ensuring that every American in the custody of the Bureau of Prisons who is eligible to vote can vote, and monitor the Census and redistricting process to fight the dilution of voting power in communities of color.

We are also calling on Congress to pass the John Lewis Voting Rights Advancement Act to finally create a fair and equal national voting system, the cause for which John Lewis devoted his life.

Student Debt

Black borrowers pay more than other students for the same degrees, and graduate with an average of $7,400 more in debt than their white peers. In the years following graduation, the debt gap more than triples. Nearly half of Black borrowers will default within 12 years. In other words, for Black Americans, the American dream costs more. Last week, Majority Leader Chuck Schumer and Sen. Elizabeth Warren, along with House Reps. Ayanna Pressley, Maxine Waters, and others, called on President Biden to cancel up to $50,000 in federal student loan debt per borrower.

We couldn't agree more. By forgiving $50,000 of student debt, President Biden can unleash pent up economic potential in Black communities, while relieving them of a burden that forestalls so many hopes and dreams. Black women in particular will benefit from this executive action, as they are proportionately the most indebted group of all Americans.

Postal Banking

In both low and high income majority-Black communities, traditional bank branches are 50 percent more likely to close than in white communities. The result is that nearly 50 percent of Black Americans are unbanked or underbanked, and many pay more than $2,000 in fees associated with subprime financial institutions. Over their lifetime, those fees can add up to as much as two years of annual income for the average Black family.

The U.S. Postal Service can and should meet this crisis by providing competitive, low-cost financial services to help advance economic equality. We call on President Biden to appoint new members to the Postal Board of Governors so that the Post Office can do the work of providing essential services to every American.

Fair Housing

Across the country, millions of people are living in communities of concentrated poverty, including 26 percent of all Black children. The Biden administration should again implement the 2015 Affirmatively Furthering Fair Housing rule, which required localities that receive federal funds for housing to investigate and address barriers to fair housing and patterns or practices that promote bias. In 1980, the average Black person lived in a neighborhood that was 62 percent Black and 31 percent white. By 2010, the average Black person's neighborhood was 48 percent Black and 34 percent white. Reinstating the Obama-era Fair Housing Rule will combat this ongoing segregation and set us on a path to true integration.

Congress should also pass the American Housing and Economic Mobility Act, or a similar measure, to finally redress the legacy of redlining and break down the walls of segregation once and for all.

Broadband Access

To realize broadband's potential to benefit our democracy and connect us to one another, all people in the United States must have equal access and broadband must be made affordable for the most vulnerable. Yet today, 15 percent of American households with school-age children do not have subscriptions to any form of broadband, including one-quarter of Black households (an additional 23 percent of African Americans are “smartphone-only" internet users, meaning they lack traditional home broadband service but do own a smartphone, which is insufficient to attend class, do homework, or apply for a job). The Biden administration, Federal Communications Commission, and Congress must develop and implement plans to increase funding for broadband to expand universal access.

Enhanced, Refundable Child Tax Credits

The United States faces a crisis of child poverty. Seventeen percent of all American children are impoverished — a rate higher than not just peer nations like Canada and the U.K., but Mexico and Russia as well. Currently, more than 50 percent of Black and Latinx children in the U.S. do not qualify for the full benefit, compared to 23 percent of white children, and nearly one in five Black children do not receive any credit at all.

To combat this crisis, President Biden and Congress should enhance the child tax credit and make it fully refundable. If we enhance the child tax credit, we can cut child poverty by 40 percent and instantly lift over 50 percent of Black children out of poverty.

Reparations

We cannot repair harms that we have not fully diagnosed. We must commit to a thorough examination of the impact of the legacy of chattel slavery on racial inequality today. In 2021, Congress must pass H.R. 40, which would establish a commission to study reparations and make recommendations for Black Americans.

The Long View

For the past century, the ACLU has fought for racial justice in legislatures and in courts, including through several landmark Supreme Court cases. While the court has not always ruled in favor of racial justice, incremental wins throughout history have helped to chip away at different forms of racism such as school segregation ( Brown v. Board), racial bias in the criminal legal system (Powell v. Alabama, i.e. the Scottsboro Boys), and marriage inequality (Loving v. Virginia). While these landmark victories initiated necessary reforms, they were only a starting point.

Systemic racism continues to pervade the lives of Black people through voter suppression, lack of financial services, housing discrimination, and other areas. More than anything, doing this work has taught the ACLU that we must fight on every front in order to overcome our country's legacies of racism. That is what our Systemic Equality agenda is all about.

In the weeks ahead, we will both expand on our views of why these campaigns are crucial to systemic equality and signal the path this country must take. We will also dive into our work to build organizing, advocacy, and legal power in the South — a region with a unique history of racial oppression and violence alongside a rich history of antiracist organizing and advocacy. We are committed to four principles throughout this campaign: reconciliation, access, prosperity, and empowerment. We hope that our actions can meet our ambition to, as Dr. King said, lead this nation to live out the true meaning of its creed.

What you can do:
Take the pledge: Systemic Equality Agenda
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Earlier this spring, I wrote an article about the several reasons why marriage is quite different from dating. One of the things that I mentioned was sex. Listen, I know that you've probably heard that the leading causes of divorce center around things like poor communication and financial drama and yes, while that is certainly true, intimacy challenges rank right on up in there as well.

It makes a lot of sense when you stop to think about the fact that, for most of us, when we say "I do," we're publicly declaring that we're entering into a state of monogamy. And if you're going to sleep with just one person, for the rest of your life, you had better be prepared for all that comes with doing just that.

So, let's tackle this today, straight from the mouths of married women. While the mechanics of sex are basically the same regardless of the kind of relationship that you're in, when it comes to the responsibilities, expectations and commitment level that married sex entails, baby, that takes intimacy to a whole 'nother level, chile. 10 wives break down how.

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Gayle. 33. Married Four Years.

"I was very selfish when it came to sex before I got married. I didn't know it until about six months after marriage, though. When you're single, everything is on your terms. When you're married, you've got to take your husband's needs and, to a certain extent, expectations into account on a whole 'nother level because something that marriage means is that you're making your spouse a top priority and that you both are agreeing to only have sex with each other. I wish our marriage counselor had really driven this point into my head. Seeing sex as a staple in my relationship and not just something to do 'randomly' or 'whenever' has honestly taken some real getting used to. Maybe the past year have I really settled into it."

Jemise. 42. Married 11 Years.

"I grew up a good church girl. I wasn't a virgin when I got married but I had only been with two guys and my husband and I waited until we jumped the broom to consummate the relationship. Because I was taught that sex before marriage was wrong, sex when I was single brought a lot of guilt and shame and, although I was proud that my husband and I waited until marriage for sex, it took a long time for the guilt and shame from my past to go away. That caused me to struggle with certain positions, sex toys and even oral sex, to an extent. My advice to women who want to get married is to make sure you know what your spiritual and emotional views on sex are. Discuss them with your partner. Make sure you're on the same page.

"Sex isn't just a physical act. Marriage will definitely teach you that."

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Erika. 25. Married Two Years.

"The reason why it's really easy to find your husband handsome and not always sexy is because, once you're married, you get to discover EVERYTHING about someone. Their nasty habits. If or how they clean the bathroom. Hell, if they've got skid marks! When you're dating, usually, a guy will withhold these things from you because they are trying to impress you. After marriage, that all goes out of the window. Even if he's the cleanest guy on the planet, you're gonna see a log he forgot to flush or something that can definitely spoil the mood. It takes some real maturity and finessing to be able to accept that the person you know everything about is the one you've got to remain sexually attracted to. It takes some doing. At least it did for me."

Aryn. 29. Married 10 Months.

"Being married is all about not letting the little things become huge. For me, it's the fact that I'm a morning person while my husband is a night owl. As far as sex goes, he wants to do it at 2 a.m. while I'd prefer 6. That four-hour window may not seem like that big of a deal. Girl, get married, though. At 2, I am dead to the world. At 6, he is. For a long time, this meant only really having sex on the weekends. Both of us have a fairly high [sex] drive so it made us resentful. We both had to compromise and make some adjustments. That's what marriage is all about. If you're not ready to compromise, DON'T DO IT."

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Regina. 44. Married 12 Years.

"If you're engaged, listen to me. You've got to prepare for how much you and your man will change over the years. You will change physically. You will change hormonally. Your lives and schedules will change. And this means that your sex life will change too. Sometimes, when you're married, you can find yourself living in the past of what your dating relationship was like. Yeah, don't do that. Marriage brings a new normal, even when it comes to sex. And once you get used to that normal, another one will come. Be flexible. Not just physically. That's my advice."

Rochele. 30. Married Two Months.

"I had to get used to going to bed differently. You ever see that A Different World episode when Whitley would wake up before Dwayne to brush her teeth and do her hair? That was me for the longest. When my man would stay over, my hair was laid, flavored lip gloss was on and I had on some cute stuff. When I slept alone, girl it was all about the bonnet, granny panties and a ratted T-shirt. The first time I came to bed looking like that in my marriage, my husband about freaked out!

"It wasn't because he didn't find me attractive. It was because he had never seen me that way and it wasn't exactly sexy. We've been working on finding happy mediums. Like I have been getting some boy shorts that are one size too small and he's been learning how to do a woman with a bonnet. Ladies, that bedtime attire is important. You don't have to look like you're going to the prom. Don't be out here looking like a total train wreck either."

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Blaire. 27. Married Six Years.

"I'm glad that you're going with middle names because I'm pretty sure that my hubby and mama don't want me going on and on about my single sex life! To protect the innocent and guilty, I'll just say that when I was out here, I was doing my thing and the sex was good. I mean, GOOD. Now that I'm married, I won't lie and say that my man has the biggest d—k I've ever experienced or that the head is the best or anything like that."

"What I will say is knowing that your lover is permanent and not transient can cause you to experience some of the most pleasurable and intense sex because you're totally relaxed and at peace with your situation. Is my husband the best sex I've ever had? No. Is he the best lover I've ever had? No one else even compares. Get married and you'll learn what I mean by that."

Zen. 40. Married Eight Years.

"Don't expect your partner to make you feel good about your body if you don't. The stretch marks. The tummy. Body acne. Cellulite. Whatever you've got going on, sometimes we as women will think that it's our partner's job to compensate for where we don't love ourselves. That is too much of a burden for any one person to carry. My sex life suffered after my second child because my body wasn't the same. And the more self-conscious I was, the less I wanted to have sex and the more uncomfortable my husband was because of it.

"I made a big mistake by thinking that if he made me feel beautiful, our sex life could get back on track. He didn't have the problem with my body. I did. I had to get into a good headspace. Once I made peace with me, our sex life got back on track and it's honestly been better than ever. Loving yourself doesn't stop in marriage. You should actually need to do it more, in my opinion because the relationship requires that you be mentally well to endure all that comes with it."

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Lavell. 36. Married Five Years.

"This is what my ass wasn't ready for. A ninja who had a lower drive than I do. Don't get me wrong. When my hubby and I were dating, because we were in two different cities and four hours apart, whenever we would see each other, it was non-stop sex. But we only got together 1-2 times a month. Anyway, because we had so much sex, I thought that it would surely be 5-6 times a week after marriage. This ninja might give it to me 2-3 times a week. Yes, I've been salty about it for all of our marriage. Check the libidos, sistahs. Your man may not be as 'down' as you'd assume."

Crystal. 46. Married 20 Years.

"Married sex is a bit of a roller coaster ride. Some seasons, you can have it every day. Some seasons, weeks will go by and you didn't even notice. It's still my favorite kind of sex because it's with someone I love, someone I'm closer to that anyone else and someone who totally accepts me and I totally except them.

"Married sex is for grown folks. Don't attempt it if you're not ready to be selfless, mature and intentional about it. Oh, and nothing can fully prepare you. Like marriage itself, you learn so much once you're in it. It's worth it, though. If the marriage is worth it, the sex will be even better, even years later."

Featured image by Giphy

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