Despite being in difficult times, there is some form of optimism that can be had in the United States: even people with bad credit can own a home. And who are the people with bad credit? These are people who have file for bankruptcy or have gone through a home foreclosure. Take note, however, that if you are one of these people with bad credit, you will be paying more in mortgage than a borrower with a sparkling credit record. That being said, the only way you are going to get a good deal on a home loan post-bankruptcy is by improving your credit score.

How To Buy A Home With Bad Credit

Bankruptcy filings may dent your credit report within ten years of bankruptcy filing, but there are actually home lenders who are willing to lend money for a home within six months after filing bankruptcy or foreclosure. But you will need to make a down payment of 20% to 35%. You will also have to contend with high interest rates and less than favorable loan terms.

To get a better deal on a conforming loan, wait four years after filing bankruptcy before applying for a payday direct lenders near me. For foreclosures, the waiting period is two years after foreclosure. After that you could qualify for a direct online payday loan lenders only near me for as little as 3% down payment.

Aside from keeping tabs on the four-year period for bankruptcy and the two year period for foreclosure, you can increase your chances of getting a better deal on a home loan online direct lender near me by improving your credit. You can do this by obtaining a major credit card. Getting a credit card post-bankruptcy is actually easier than you think for three reasons: (a) you go around with a clean credit record post-bankruptcy, (b) lenders know you have no credit, and (c) you can't file for bankruptcy again for another seven years.

Other Ways To Improve Credit

Still, if you aren't comfortable about obtaining a major credit card (because you are addicted to swiping your credit card), there are other ways to get a better deal on a qualifying loan by improving your credit score. These include:

* Holding on to a steady job for at least one year

* Earning a regularly paid salary

* Saving money for 10% down payment

* Paying your bills on time

If you reach a FICO score of 600 post-bankruptcy, you would typically get an interest rate of 5.875% and pay $1,183 every month on a $200,000 amortized loan. Although the monthly payment is $215 over that of a borrower who never went bankrupt or foreclosed, at least it buys you a home.