First Time Home Buyer?

Question

Hello,

how difficult a time am I going to have being able to buy a first home? My wife and I both have extremely poor credit. We have the $$ for downpayment (10% - 20%)... but from the looks of it banks aren't going to be inclined to look favorably on us.

Any thoughts?
Thanks,

FYI:

I recently checked my credit scores and this is what came up...
Transunion: 503
Equifax: 459
Experian: 574

I have noticed numerous errors in all 3 reports but didn't think it was worth my time to fix... I'm beginning to think I was wrong

Answer 1

First off... you have many options...

Ill start with your credit.... Depending on the type of errors you have, you can pay for a "credit rescore" which can quickly clear up any issues on your report...

Also, what is your wife's credit score?

Being that you have 10-20% for a down payment, there is no reason you will not qualify for a home... It may be at a high interest rate, but at least you can take the necessary steps to get your credit up to par...

One of the best things to improve a credit score it to carry real estate debt with no payment delinquincies...

So even if you get into a house at an extremely high rate...Within 1 year of making ON TIME payments, your credit will shoot up immediately!!!

My quesiton is who have you talked to that has said you wont qualify for a loan? Im assuming a large retail bank (one that primarily focuses on checking/savings/assets?) such as chase, wells fargo, national city, washington mutual?

These banks are called conforming lenders... They only give loans that conform to freddie mac, and fannie mae guidelines...

They will only lend to people with a 640 credit score or higher!!

What you need to do is work with a non conforming specialized lender... I have a portfolio of investors that my company has partnered with allowing me to lend to people with 450 credit scores, all the way up to 800 credit scores!!

What i suggest is you give me acall, i will be happy to take a look at your credit, and give you an analisys of what you wualify for..

From there you and your wife can decide if it makes sense for you...

My name is Jason Fry, i work for Providential Bancorp, a anationwide mortgage lender.. You can reach me at 312-264-6448, or email me at [e-mail]...

I hope everything works in your favor, and you can get into your first house!!

Thanks,

Jason Fry
Senior Mortgage Specialist
Providential Bancorp
312-264-6448

Answer 2

0%? Help with score below 500?

Of course you qualify BUT I would not suggest you do any of those loans. The reason is you will pay VERY high interest rates. It is true that with a real estate loan paid on time for about a year, your score will go up BUT are you willing to pay high interest rates for almost one year?? I think it would be just as bad as throwing your money down the toilet when you rent.

I suggest you start at the bottom of the problem, your credit score. Fix all the errors on your credit history and better your score starting today. Now, companies might contact you or you might see companies that swear that they can help you bring your score up. Many of these so called "credit clinics" are a BIG SCAM so becareful. You can fix your credit score on your own. It takes some dedication and education. To fix your score it does not only count when you make your payments on time. There are other factors that are looked at as well.

I invite you to read my blog where you will find an article titled "Credit Clinics? Can they really help?" in the December 2005 archives. You will also find numerous other articles that are very helpful and educational.

Enjoy the reading, good luck.

Answer 3

I've been there.

First, you have to get the errors fixed. That takes the longest, so start with that.

If you have any outstanding unpaid debts, pay them off. I don't care if "it's the principle of the thing." Pay them and get them off your report. My score took a big hit because of a library book I hadn't realized I didn't return. The library hired a collection agency that I never heard from and a debt was on my record.

If you have credit cards and stuff on your report, get them paid down as much as possible. Part of your score comes from the ratio of available credit to how much you've actually charged. That is, if you have a card with a $1000 limit and your balance is $900, that's not as good as a card with a $1000 limit and a balance of $100.

Your numbers aren't terrible but they are low enough to put some lenders off. You'll be amazed at the change in your score after doing some of this stuff.

Good Luck!

Answer 4

Those scores will not get you a house with only 10% down. You need to get those errors fixed and get the yourself re-scored. Almost all mortgage companies will not lend to someone with a score under 500. If they do, expect a extrememly high rate and to put AT LEAST 20-30% down. All first time buyers need a loan-to-value ratio of 80%, which means 20% down, and those are people with good scores. I suggest getting your report fixed and trying again in 6 months

Answer 5

First, don't get discouraged cause you have options.

Option 1: Buy a "Starter Home". you may ask what's a "Starter Home", well have you ever seen a sign on the side of the rode that says "$0 down" or "Payments as low as" for companies such as Matthews Brothers, Beazer, or Bowdon Homes. We you go to these places they don' really car what your score is as long as you have a job and have never filed bankruptcy.

Option 2: go to http://www.service1mortgage.com and fill out the small for and you will have banks that want to help you and give you a loan call you.

Answer 6

I would definitely get those credit reports fixed, it can make a big difference to a bank.

I would also go to the bank and try to get pre-qualified for a home loan. That way you know how much you have to work with and it makes the seller feel at ease knowing you already have the cash waiting for you at the bank.

Answer 7

You really need to focus on rebuliding your credit. My friend has a habit of buying items and then returning them before the end of the month. Although it was only a return, it comes up on your crdit report as paid in full and on time. Don't do this if you don't have discipline, but it is really working for her. Credit score is steadily rising.

Answer 8

pass see a interior of reach loan officer - it is loose - to enable you be responsive to strategies you need to finance to confirm what works right for you - additionally confirm you get a Realtor - or somebody who sells mobiles - you will intend to confirm you very own the land - with the aid of fact it is in an area - are there any regulations for that association/community which you would be able to no longer stay with? What are the regulations in case you opt for for to pass the cellular someplace else later? additionally, cellular financing is very distinctive than widespread financing - larger costs of activity & extra $ down - until you get a lender that specializes in modular or cellular homestead sales and seek for an affidavidt of affixation - makes the homestead properly worth extra if it is wheels are bumped off and it is completely on the floor/land. undergo in recommendations additionally, that a cellular has much less resale value later (i does not purchase a cellular) i might purchase a widespread stick outfitted homestead - extra clever costs and private loan concepts.

Answer 9

I had to pay off all my debts to the credit companies before I was approved. It cost me around $3000 to do that, but I went through a program that assists in closing costs and low interest. I'm not sure where your at, but I'm sure there are programs like that you could go through.

Answer 10

With a 503 mid score, you most likely won't be able to get approved for financing. FHA might do it with enough down when your score gets above 540.

Good luck