I have bad credit. Is buying a home out of the question?

Question

any web sites would be great. please be specific and pleas just dont tell me yes....tell me how!

my credit is lucky to hit 500

Answer 1

There are other factors to consider, besides credit. Medical Bills are Over looked buy underwriting (since medical is a un-forseen event), where as credit cards, are looked at (since you purchased items on a credit card.) Also, Job time of 2 years, Rental history for 2 years is looked at. What collections & judgements are on your credit report. Some collections may not have to be paid off. Judgements may need to be paid off - depends on the Lender and Their Underwriter. 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 middle credit score is 500 or higher, anything is workable, with a seller second What I mean by a seller 2nd is this: YOu buy a home, it get appraised for 100,000 you get financing for 80 percent (LTV) loan to value, the seller can hold a 2nd montgage.....for the 20 percent. 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.... Good Luck, and if I can help in any way check out my web site, for links to all the credit reporting agency's and other useful information.

Something else to think about. Do a Land Contract - make sure it is a recorded land contract at the court house....Pay your payments (by check for 12 months) after the 12 months are up, you can refinance the home in your name -payoff the land contract to the seller. This will give you 12 months to build your credit, pay off any collections etc.

Helpful websites:
http://www.nehemiahcorp.org/

http://www.fanniemaefoundation.org/...

http://www.fha-home-loans.com/

http://www.freddiemac.com/

When you are ready to get the financing you need = Please consider the following.
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. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.

Depending on what state you live in - check out the USDA Rural Program also - the payments are based on your income. There is alot of paperwork involved....But it may be one option for you.
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Welcome to the USDA Income and Property Eligibility Site
2. This site is used to determine eligibility for certain USDA home loan programs. In order to be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased must be located in an eligible rural area as defined by USDA.
To learn more about a USDA home loan program, click on the Loan Program Basics link on the left side of this screen and select one of USDA's home loan programs.
To determine if a property is located in an eligible rural area, click on the Property Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate property eligibility screen for the Rural Development loan program you selected.
To determine income eligibility of an applicant/household, click on the Income Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate income eligibility screen for the Rural Development loan program you selected.
To find out how to apply for a Rural Development Loan, click on the Contact Us link on the left side of the screen and then select a Rural Development Loan program.

Answer 2

It's not out of the question but you need to be very careful about lenders. I'd go to a reputable bank, credit union etc. first to see just how bad your situation is. You might be surprised. They might also be able to give you some suggestions on how to improve your credit at least a bit before you actually apply for a loan.

There are a lot of "bad credit" mortgage lenders. They sound like a dream come true but often the fees, interest etc that you have to pay are ridiculous.

I used to work for one of these places. The had a number of lenders who actually provided the funds for your loan. The choice of which lender to go with wasn't based on the client's needs, it was determined by which one gave the loan officer the most back points (monetary rewards that you'll never know about).

Shop around and don't seem desperate.

Answer 3

Get a copy of your credit report.

Start by getting a copy of your credit report and find out exactly what's damaging your credit. If you've ever had trouble paying your bills - and even if you haven't - chances are very good you'll have at least some negative information on your credit report! So it's worth checking at least once a year. You can order your report online from the 3 major credit bureaus, so you can review your report, look for errors, and identify damaging information. If you have not received a copy of your credit report recently, then you should order a copy as soon as possible! You are now entitled to one free credit report per year from each of the 3 credit reporting agencies (Equifax, Experian, & TransUnion).

Review your credit report very carefully!

Then look very carefully at everything that's on your report. Because statistics show that a large percentage of credit reports contain errors that are lowering your score. Make a list (or highlight) all the errors and negative items, and start trying to fix the most important ones first.



Dispute the negative information that you want removed.

Finally, dispute any item that does not belong on your credit report, or that's hurting your score. Learn how to repair your own credit so you can improve your credit score. It's not that hard, but the right information will save you lots of time and trouble. You'll learn actual tips and techniques that will help you improve your credit rating, plus all the rules and regulations that credit reporting agencies MUST follow that give you a big advantage over these agencies. Learn how you can get your credit back to normal, using the same manual I used to clean up my credit report an improve my credit score.

Answer 4

Not necessarily. Your best bet would be to find a "lease to own" option on a home and then see if the seller will finance it himself. Then there's no bank involved. That's not a very typical scenario, however, you'll have to do some due diligence to find such a deal.

There are also programs like Fannie Mae, although they may be for first time buyers only. I'd at least check with them, they can probably tune you in to some govt programs that might help.

Or, you can seek the advice of a credit counselor, and see what you could do to clean up your credit before attempting to buy.

Answer 5

No it's not out the question, I am in the middle of purchasing a home now. My credit is not the best, actually during my process my points actually dropped by like 10 or 15 which in turn had me so scared but it is all working out. I should be going for my closing next week on the 26th or maybe even sooner. So take it from me, have faith in the Father and all things shall be added unto you. Email me if you are in the Richmond, VA area and I have an excellent mortgage broker and real estate agent for you.

Answer 6

Before you sign anything, let somebody look over the paperwork you're about to sign. If I hadn't I would've been screwed out of 6k!! Mortgage companies will try to get any and every penny out you especially if they know you're a first time home buyer, they know that you don't know what the hell you're doing!!

It's not impossible to get a house w/bad credit. it really comes down to how much you make a year! It's a pain in the *** proccess that you have to go through but in the end it's totally worth it. I'm a first time home buyer for 3 months now! it's such a great feeling!

Good Luck and be careful!!

Answer 7

you should start by contacting a lender period .
there are litteraly hundreds of home loan plans out there , someone will beable to help you with this , in the mean time work on your credit ! one good standing credit card works wonders for rebuilding your credit ,if you begin to work on your credit then lenders can find a loan that will save you a ton of money in the end . apply for a credit card , get some kind of positive activity on you report and youll be surprized at how fast your score comes up . good luck !!

Answer 8

No ... you will want to visit www.lendingtree.com

Depends on how bad your credit is. If you can manage a 640 or 650 credit score, you will probably get a mortgage, but be prepared to pay SUBSTANTIALLY more in interest than someone with a higher FICO score.

You might also want to check with your bank, with which you already have an established relationship.

Answer 9

We get exceptions for bad credit. In the process I will teach you how to improve your credit in the process. I work for a nation wide direct wholesale lender. I can promise you would get the best rate best program, based upon your situation. If you would like more information you can contact me at (818)-921-8807. My name is Jason Wyatt. I look forward to helping you.

Answer 10

It is not out of the question. You just may have to pay a higher interest rate and not be able to afford the house you want most. Your best bet is to go to a mortgage company and try to get preapproved for a loan.