11 Steps for Getting approved when you have Bad credit

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Reprinted with permission of John Michael

1. Find a home to lease option. You need to show 12 months of payments on time. Try for an 18 to 36 month lease option. There are many resources to help you locate lease option property.

Realtor.com is a great source for lease option property

2. You and the property owner need to sign the agreement before a notary and then you need to record the document.

This will cloud the title and provide you what is called notification protection

3. Make your payments on time.

4. Make your payment by check and keep these cancelled checks. This is the best proof to a lender that you have made your payments as agreed.

I suggest opening an account just for this home for better record keeping

5. Keep a copy of your signed contract.

6. Don't wait until the last minute to apply for a mortgage to pay off your option. Start 5 months before your option comes due.

7. If possible holds off on any large purchases until you have paid off your option.

8. Keep your property in good shape. If you are buying your home on an option, the lender will want the property appraised. The higher it appraises for in comparison to what you owe the better for you! Take photos of the property before you move in. Do cosmetic repairs that photo well and improve its appearance.

9. If possible, don't change jobs right before applying for your mortgage (keep that job until you get your mortgage).

10. If you don't have any established credit that reports to the credit bureau - try to establish some. Do not get any more bad credit reports during your lease option.

11. Keep all your important papers together.