How can i purchase an affordable home, with little money down and bad credit?
May 28, 2009 in
Financial and Loan Tips
vsuniga22
I need a home, I have 1500 right now, but i have bad credit, im a first time home buyer, where can i get a nice affordable home, with bad credit and at an affordable monthly rate? Where do I start?
I need a home, I have 1500 right now, but i have bad credit, im a first time home buyer, where can i get a nice affordable home, with bad credit and at an affordable monthly rate? Where do I start?
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5 comments
esarhatlic on May 29, 2009 at 10:18 am
talk to your real estate agents in your area… when you call a real estate agent ask them how many years of experience the real estate agent has… experience counts… the real estate agents in your area know the best mortgage officers that could help you
holly on June 1, 2009 at 5:20 am
Try Resourec bank.They are a big lender and will help ouy with those credit problems. Sometimes you can roll unpiid debts on your credit report into the loan youo are buying the house with.If you have a prety solid say 2 or more years at the same job they are more willing to help you. You will also need the income to back the loan. Look hard andyou will find a lender.Try not to use a broker for the loan as they just charge you additional fes to find a lender to give you a loan.Use as a last resort,as you will pay much higher intrest rates and junk fees to close these loans. Look into FHA backed loans they will give more money to people with credit situations.They do require mtg. ins, paid upfont, but they can be rolled into the loan also.Don’t give up, you will find a loan.
stephaniekdarnell on June 1, 2009 at 6:56 pm
There are so many gov’t programs out there for first time home buyers. My husband and I are about to buy. We’re part of a program that gives you $2000 toward the purchase of a home once you’ve saved up $1000. We’re going to get a $155,000 house (3 bedrooms, 2 bath, 1100 square feet). The loan will be for $105,000. $30,000 is paid by some gov’t program. We don’t have to pay the $30,000 back as long as we keep the house for 5 years. $20,000 of the loan doesn’t have to be paid back until we pay off the first $105,000, and it does not gain any interest at all.
check with your local FHA or USDA office (used to be the FHA, but is now the USDA where we live, probably where you live too) they have great programs for first time home buyers. Good luck!
gailforce_wind on June 5, 2009 at 12:40 am
FHA loans allow for 3% down payments with shaky credit for first time home buyers. You will have to clear any outstanding collections first and have at least one good trade line, but if your income is sufficient, FHA will work for you.
$1,500 is not a lot of money even at 3% down. You might want to do what you can to improve your credit so you can apply for a 100% mortgage avoiding a down payment altogether.
Keep in mind there are a lot of expenses in buying a home. You may have to pay some of the closing costs, you will have to buy insurance and get the utilities set up in your name plus the cost of moving. So keep saving.
jgmeier93592001 on June 5, 2009 at 8:24 pm
Depending on the reason for the bad credit, that would dictate the program that would best suite your goals. However since everyone on this posting is recommending FHA, I will not rock the boat. FHA is a great program for people with credit challenges, but not necessarily the program for First Time Homebuyers.
FHA will allow people with FICO scores of 560 (northeast), 560 (Midwest) and 520 (California), to be able to file for an application. Again, depending on the reason of the credit issues would determine if you’re going to be required to pay some or all of the outstanding bills that you might have. I have never seen on a purchase where debt was rolled into the original loan amount. You can obviously do that on R/T cash out, but on a purchase, I have never seen that.
FHA will allow for a 6% sellers concession that can be used towards the down payment and the closing costs. Maximum financing is 97%, there for you technically getting 103% financing (little or no money).
Depending on where you live, there are many government (state and federal) programs to assist with purchasing a new home. There are also non-profit companies that also assist with the purchase of a new home.
To determine where you start, it sounds like you need to talk to a mortgage professional to outline
1)your credit concerns and how to address them
2)your monthly debt including the proposed housing
3)the program that will best suite your financial needs.
If your mortgage lender is not asking you questions on your goals and just taking the information for the 1003 URLA, then I would suggest that you walk away before you give your SSN. They do not have your interest at heart and only looking to make money.
One other thing…when you decide to have companies pull your credit report, make sure that you visit all the companies you want to apply for with in 14 days and heve them pull your credit. Your credit will not be effected with in the 14 day window as long as you stay with in the same genre of credit application.