Home Ownership is the American Dream

Home ownership is the American dream. Owning a home is both an investment and an opportunity to give something to the next generation. However, for people with bad credit, owning a home seems like an unattainable goal. If your credit is less than ideal, don’t give up hope, because there are ways for you to own a home.

Your Credit Score
Although a great credit score isn’t a requirement for home ownership, the easiest way to show you’re ready to own a home is to have a credit score that reflects your ability to manage credit and pay bills on time. Pull your credit report and dispute any late payments you feel are inaccurate, and pay down any credit cards with balances as fast as you can. It’s not going to happen overnight, but you can easily turn bad credit into average credit, and that might be enough to get you into a house.

Government Help
The government’s HUD program sells foreclosed houses at market value, offering home ownership opportunities to people of modest means, victims of natural disasters or those recovering from credit crises. To buy these homes, the government offers FHA loans that are designed for first-time homebuyers. These loans require only a 3 percent down payment and allow homebuyers to roll closing costs and home-buying fees into the loan.

Even if you’ve found a HUD home you like, you might not be able to qualify for a FHA loan on your own. If this is the case, you might want to consider asking a friend or family member to co-sign on the loan. In this arrangement, you’re both responsible for taking out the loan and paying it back. This means you benefit from the co-signer’s good credit, but it also means that person’s credit might suffer if you cannot manage your mortgage payments.

Rent-to-own arrangements aren’t widely popular, but they can be beneficial. Your monthly rent payments go to the homeowner, as is the case with any other rental property, but a portion of that payment goes toward a down payment on the home. After a specified time, you have the option to purchase the home. This is one way to improve your credit to the point where you’ll be able to qualify for a loan at the end of the agreement.

Costs of Owning
When buying a home, consider all of the associated expenses. You’ll have to pay property and school taxes, and your lender will require you to have  homeowner’s insurance. Also, you’ll be responsible for fixing everything that goes wrong, maintaining the property and keeping the interior and exterior in good shape.

Home ownership may be tough to achieve in today’s world, but if there’s one thing history teaches, it’s that nothing is impossible. There are plenty of ways for you to own a home, but you have to put yourself in a position to succeed. If you can’t buy a home now, work on your credit, keep an eye on the aid programs around you and be ready to take advantage when you find the home of your dreams. Your hard work will pay off, and you’ll be able to enjoy life in a brand new house.

About the author: Dawn Altnam lives and works in the midwest, and she spends time learning as much as possible about finance and real estate. She enjoys business technology, reading and golf. Follow her on Twitter! @DawnAltnam


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