Knowing how to buy a house with poor credit has become a top priority for many people. Several options exist to help you buy your dream home including lease to own, seller carry back financing, first time home buyer programs and government grants.

The Internet is a good source for learning how to buy a house in today’s market. It’s best to stick to government websites such as the Department of Housing and Urban Development, Veterans Administration and Federal Housing Administration or recognized realtors such as Century 21 and Prudential real estate.

Use caution when real estate websites focus solely on selling a course. Unless you want to learn how to buy a house as a real estate investor, there is no need to buy training courses at this time. Everything you need to get started can be found online at no charge.

One option for buying a house is through lease to own contracts. The property owner and buyer work out terms best suited for them, but must abide by usury and real estate laws. Lease to own involves the buyer providing a down payment and the seller contributing a portion of the rent toward home purchase.

Rent to own contracts last between one and five years. Buyers can establish or rebuild credit by paying lease payments on time. When the leasing contract expires, buyers can apply for a traditional home mortgage loan.

Careful consideration should be given to lease to own real estate. Both parties should be willing to undergo a background and credit check. Buyers must beware of potential foreclosure or mortgage fraud scams. Remember, if it sounds too good to be true, it probably is. It is strongly recommended to retain the services of a real estate attorney to draft or review rental lease to own contracts.

Another house buying option for people with bad credit is seller carry back financing. Sellers act as a mortgage lender and carry the financing on all or part of the purchase price. Most sellers carry between 5- and 30-percent and buyers finance the balance through a commercial or hard money lender.

Seller carry back mortgages last between two and five years. Buyers have two mortgages; one to the lender and one to the seller. It is best to hire a lawyer to draft seller carry back trust deeds and file real estate transfer documents.

Buyers with bad credit might qualify for Home Path Mortgage; a program selling discounted Fannie Mae bank owned foreclosure homes. Bank owned homes include properties that did not sell through auction and are returned to the lender.

Also known as real estate owned or REO properties, bank owned real estate is priced higher than foreclosure homes. However, REO houses are sold with a clean title; eliminating the headaches of lien and judgment removal.

Buyers must be able to provide a minimum 3-percent down payment to purchase Home Path Fannie Mae foreclosure homes. Qualified applicants can apply for Neighborhood Stabilization Program grants through the Department of Housing and Urban Development. NSP grants are provided to individuals who purchase a home in areas which have been devastated by foreclosure.

These are just a few options of how to buy a house with poor credit. Educated buyers can save thousands on already discounted real estate, acquire instant equity, and improve their credit while working toward home ownership. If you are thinking about buying a house, now is the time to learn about the various types of real estate and available financing options.

For more information on buying or selling a home visit Philadelphia Homes.