How do people purchase homes without a downpayment and good credit?

Answer 1

Well, not having a down payment or good credit, will certainly affect the type of loans, you will qualify for. You should at least try to fix your credit by getting a free credit report from freecreditrepport.com. You should make a plan of when you would like to become a home owner. You should try to have at least a 650 in credit score and if you dont, give your self one to two years to clean it up. You should mail all receipts to the credit bureau's listed on your credit report and you can get the problem fixed alot sooner, also your bank would like to see that the problems are resolves even though your scores does not reflect that right away. You should go to a mortgage broker and find out how much you qualify for and let him know that you want to do the no money down program. This is a 80/20 mortgage, 100% finance by the bank or finance company. You must have at least $100 for when you are looking at a house, some homeowners like to see a downpayment, because then they know you are taking this process seriously. This money will go into escrow and if you change your mind you can get it back. Also you might need a couple more dollars to pay for inspections, closing attorneys, or termite inspections. So have between $900-$1500 dollars available, this depends on the state you live in. You dont have to have this up front you can pay as you go along. It is a good idea to get an inspection so you dont end up with a money pit. If you qualify for a home, then go and look for homes in that price range. There are other programs like the Nehemiah program, that not only pay your closing cost and down payment, this program allows you to become a landlord, if you have units in your community. This program would have to be agreed upon by the person you are buying the house from because they would have to make an investment in this as well. Most mortgage brokers don't have enough experience to help you in this task so get advice from more than one before making a decision. Finally, don't have them run your credit too often because this does lower your FICO score; if you do it too much during the same month. Get your scores and bring a copy of it to the realtor with you. If you forget, it wont affect you, if you do it once, just ask the person who pulled it to give you a copy. Nothing is impossible my friend. I hope this is helpful. Oh that is how I bought my first home.

Answer 2

After reading all the feedback - You must be totally confused.

There are other factors to consider, besides credit. Job time of 2 years, collections on credit report - judgements on credit report. All of these are taken in as a factor on getting a home loan. Credit can be worked on, by adding alternative credit. If you are paying regularly on a cell phone, auto insurance, rent, etc - these are called alternative credit.. All is not HOPELESS - ok - take a deep breath. If your credit score is 500 or higher, anything is workable, with a seller second - etc the higher the credit score the better. Lenders look at the middle score...of the 3 scores. If you only have 1 score or 2 scores (have seen it), it is still workable....but unless a lender sees the whole picture - credit - income - job time, etc - than you will not have a "true" picture of what you can afford - Hope this helps - There are also Government programs out there, but they too are looking for job time, etc.....They are not so much looking a credit - but the other factors are taken into consideration. With a government loan - collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true..

A 100 percent loan - is not totally out of your reach - There are payment assistant programs to help you. If you can not afford a home - you can check out this website - it is the USDA Rural Program, that allows a person to get a home, and your payment is on a sliding scale.

Go to: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do


If you decide to not go with the USDA Rural Program, than decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 2-6 percent of the selling price, and you ask for 4-5 percent toward closing cost -assistance) Follow me so far??

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score.

Good luck to you.

Answer 3

I am currently in that situation. There are programs out there that will finance you with no down payment and if you are talking about not having good credit, same thing. The FHA will finance people 100%. You just have to find a realtor who knows about that program and or other programs to help you get into a home. Dont worry, there is a way to buy a home with no down payment and not so good credit. They are out there. It does make it easier to have co-signers on the loan as well. Hope this helps ya.

Answer 4

you may not borrow the downpayment. highly in at present's climate, the position sources and income are being examined on merely about each and every personal loan. Whomever underwrites the inner most loan on your lender will opt to make certain data of the source on your downpayment. frequently, the downpayment will opt to be on your actuality - from an account on your call - for no less than the previous 2 months. If the money isn't on your depository account for no less than that lengthy, the lender will require data showing the position the money got here from. If the money changed into borrowed, it won't be able to be used as a downpayment. If the money turned right into a present from a relative, there'll be limits on the allowable quantity. Your downpayment is your epidermis in the game. It shows it may ward off money and, because it is your money tied up in the homestead, makes it a lot less probably that you're going to default. If the money isn't yours, yet is borrowed, you've not any epidermis in the game and are extra probably to default. this variety of vast quantity of lenders are transforming into burned by using human beings strolling faraway from residences even as they have borrowed the downpayment that maximum of those personal loan courses have lengthy previous away... yet... There nevertheless are not any-money-down concepts for those with reliable credit. Fannie Mae's MyCommunityMortgage, and Freddie Mac's HomePossible are 2 products that maximum personal loan originators furnish. FHA also calls for little money down. really than borrowing the downpayment, attempt to make certain about those personal loan products.

Answer 5

First of all, FHA does not finance 100%. They finance 97% of the purchase price and then it is up to the buyer's Realtor to make sure that they seller will pay closing costs and also participate in a down payment assistance program. Secondly, Realtors do NOT know anything about mortgages. No offense Realtors, but please do not go to a Realtor with financing questions. That is not their job. The Realtor looks out for your best interests and protects you and negotiates for you. The loan officer takes care fo the financing. Don't get them confused.

Now...you CAN purchase a home with little or no money down and with questionable credit. I know that you can because I do it everyday.

If you would like more information on these types of programs, please feel free to contact me at timothy.kazee@americanhm .com and I would be more than happy to help you would with this.

Good luck!

Answer 6

depending on what your score is, many lenders, usually subprime, will offer loans that don't require any down payments at all. there may be some things you need to pay up front like taxes and insurance and so forth but if your score is 650 or higher than it's very easy to purchase a home and get a 100% loan for the amount of the house.

Answer 7

There are several options. If you are willing to do some legwork, look for homes that might have been on the market longer than normal. See if the seller is willing to finance the purchase himself or will enter into a lease-purchase. Always consult a professional when entering into an agreement like this, and be careful of unscrupulous homeowners.

Answer 8

People with bad credit and no down purchase homes everyday. They pay higher interest rates. But if they continue to make the payment on time on there home loan they can refinance and lower their monthly payments. If your interested in purchasing a home feel free to check out my website: http://www.firstmeridiancapital.com/9StepstoOwnership

Answer 9

they dont without a large down payment or good credit you cant buy a house, if you have bad credit you can buy with large down