Portsmouth NH Real Estate, Seacoast NH Real Estate, Portsmouth NH Homes For Sale, NH MLS Listings


Bad credit happens. Maybe you were late on some loan payments, or maybe you got a bit to swipe-happy with a credit card while you were in college. Or, maybe you were like many other Americans who took a financial hit during the housing crisis. Regardless, it can take a long time to recuperate from a bad credit score.

If you’re hoping to buy a home but have poor credit, it can seem like you don’t have many options. However, there are many mortgages designed with such people in mind.

In this post, we’re going to discuss some of the options for people interested in home ownership who have low credit and ways they can achieve this goal without taking on high interest loans.

First thing’s first: start prioritizing your credit

Even if you want to buy a home within the coming months, it’s always a good idea to start building credit. It does take several months to see a substantial difference on your credit report, but starting now will save you in the long run and will show lenders that you’re making a difference.

To give your credit score a boost in the shortest time possible, set all of your bills on auto-payment, repay and late bills such as medical expenses, and set up payment plans wherever needed. If possible, become an authorized user on someone’s credit card and use that for everyday expenses like groceries. Doing so will help you build credit without opening new cards that have high interest.

Many types of mortgages

Mortgages come in many shapes and forms. Since lenders are in competition with one another, you can often find loans that cater to underserved markets. In this case, that market is people with low credit scores.

Call some local lenders and ask if they have programs for people with low credit. Often they will point you toward first-time homeowner loans and USDA-guaranteed mortgages. Other times they might offer loans with high down payments. But, you’ll never know until you ask.

USDA and FHA Loans

Currently, USDA loans have a minimum credit score of 620. For FHA loans, lenders recently reduced the minimum score to 580. With these loans, you can pay a low, or no, down payment and still receive a mortgage loan.

The first step to getting approved for either type of loan is getting in contact with a lender to determine your eligibility. Eligibility is based on other factors such as your income, and in the case of USDA loans, the location of the home.

Other Options

If your score is lower than 580 or you don’t qualify for a USDA loan, you can still find other options. One would be to pay a higher down payment on the home. This would help ensure the lender that you are able to provide income to make payments in spite of your credit history.

Another option would be to reason with your lender of choice. Most of the application process comes down to numbers, but if you can show a lender that you have substantial, reliable income, and have been making rent payments for multiple years, these can both help build your case.


Finding the right house that meets your family's needs is an important decision; it's one that can affect the quality of your life for years to come. That's why it's especially important to be in a focused, resourceful state of mind when house hunting. It's also helpful to have a clear idea of what you're looking for and have a system in mind for comparing the strengths and weaknesses of every house you visit.

Knowing What You Want

Chances are, you're going to approach your house search with some preconceived notions about features like the floorplan, bedrooms, and number of bathrooms. You may also have strong preferences for a particular school district, the size of the back yard, and proximity to neighbors. One thing's for sure: There are a lot of details on which you'll need to concentrate as you meet with your real estate agent and visit different homes for sale. While conditions are not always ideal for taking it all in, here are a few tips which may help you get the most from the experience.

  • Work from a checklist: Before plunging into a serious house-hunting campaign, it's a good idea to prioritize the features and characteristics you're looking for in a new home. Ideally, you should have a separate copy of the list for each home you visit and create a simple rating system for evaluating how well each property lives up to your expectations. Make note of your impressions and take a few photos of key rooms, such as the kitchen, master bathroom, or whatever areas are most important to you. As a courtesy, ask the real estate agent if they or the homeowner would mind if you took some pictures.
  • Arrange childcare if possible: When you're going over important details with your real estate agent or visiting a listed house for the first time, you'll be able to get more out of the experience if you can devote your full attention to it. Children, especially young ones, tend to be more focused on their own agenda, including hunger, boredom, sibling conflicts, and the impulse to wander off on their own to explore unchartered territory! When the opportunity arises to check out a potential new home, you'll want to have 100 percent of your mental and emotional resources available to appreciate and absorb all the details, nuances, and possibilities of a house that's for sale. Since "the best laid plans of mice and men often go awry", it won't always be feasible to arrange alternative (and sometimes last minute) childcare plans for your little ones. When it is possible though, you'll have more of your wits about you for the important task at hand.
  • While it's unrealistic to always expect house hunting to go smoothly and without a hitch, a focused and organized approach to finding the home of your dreams will always yield the best results!
     




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