Truthfully, you have lots of options for getting into home ownership with bad credit. While you’re most likely going to pay higher interest rates (if you can qualify for a mortgage), bad credit doesn’t always automatically mean you’re doomed when it comes to home ownership; and once you start looking, you’ll find there are options you never even thought of, or knew of. But among those many there are a few that often outshine the others, and prove to be the best way to get a mortgage with bad credit.

Here are the three best ways to get a mortgage with bad credit.

#1: Rent to Own
Believe it or not but there are many investors out there that are willing to help you by buying the house you want and renting to own it to you.  Consider it a WIN-WIN for both.  The investors make a return on their investment while you get the house you want today and an investment for your future.   Beats paying your landlord another $1300 per month for the next year.  A rent to own affords you the time you need to repair your credit and accumulate a bigger down payment – both of which make you a lower risk to a lender when it comes time to qualify for your own mortgage on the house.

#2: Starting with a larger down payment
This is the best way to get a mortgage with bad credit. Generally you need 20% of a home’s purchase price as a down payment before lenders will even consider you. Some will allow you to still obtain a mortgage with less, but you will need to buy mortgage insurance, which can come at a cost of thousands of dollars a year. But pay over 20%, and as much over as you can, and lenders are going to look more kindly on you. By paying more now, lenders have to loan you less; and that’s always good for them because they don’t have as much risk.

#3: Get a private mortgage
You can find corporations and individuals that might be willing to offer you a private mortgage. Essentially, they act as the lender and loan you the money to buy the home. Keep in mind that private mortgages will usually have a higher price tag associated with them.  Expect interest to be 10% and up on any amounts loaned for a private mortgage.  Although this option is different from a conventional mortgage, in that you may not need the same qualifications as a lender would require to get approved, you will still need an actual mortgage contract and all proper paperwork set in place.