Can you get a loan to buy a house if your credit sucks?

Question

Someone told me that u can get a loan and still buy a house if ur credit is crappy. Does anyone know how? Was the guy that told me that being honest. Is there hope of me getting a home wih bad credit?

sh3rond06 CONTACT ME [e-mail]

Answer 1

l am a Mortgage Broker for the past 2 years working for Country Wide Home Loans.

The answer is... How badly does your credit suck?

If you have a Fical Score below 680, as long as it is still in the 600's, you can approve for a home loan with a mortgage broker rather than a bank. Mortgage BRokers bring a large amount of volume to the bank and in turn, the bank offers broker's the ability to buy down interest points, or make exceptions for people with crappy credit scores.

If you have a score in the 500's, you will be able to get a loan only if you can come up with $20,000 for every $100,000 you wish to finance.

If your looking to buy a $400,000 home, you will need no less than $50,000 to put down.

I have been able to qualify people with 538 middle fico score for home loans. Right now the mortgage industry is stagnating so the banks are making exceptions here and there.

But, the key is, you need some assets. Either cash money or sellable property.


The other possibility is you can have a cosignee. If your parents or girlfriend has good credit, you may be able to use their credit to help you get a home - so long as they allow you to. Most Banks and Brokers perfer NOT TO give loans to couples if one of them has excellent credit BUT, is not the top earner of the family. The bank considers this a high risk factor. However, right now with the US market in decline, you may be able to qualify under extenuating circumstances.


Keep in mind though that the worse your credit rating, the higher the interest rate will be. Its really sad but people with the worst credit are unfairly forced to pay the highest interest rates while those with 700+ Fical scores are given all types of adminities.
You might want to try and repair your credit by paying off your debts and keeping them all on time and paid. Once your Ficals rise above 780, you'll be ok.

Answer 2

Pulling credit does effect your credit score. However, it makes up 10% of your score. Also the inquires only last for 120 days on your report. If there are a couple of credit inquires on your credit a bank will know you are shopping. However, that does not mean you will be turned down. I disagree with the other answer. There is no "turn down" low credit score. A bank is required, specifically by regulation "F", the fair lending regulation, to turn down based on more than just a credit score. The credit score matters but can be mitigated by the lender in order to make the loan. Also PMI does not always apply when you are less than 20% down payment. For example, there are always VA mortgages if you are a vet. They also can be 100% financed with no PMI. Building is more expensive than buy. However, if you have the means and that is what you want Go for it! It is less than 25% more expensive, that is a wild guess and it will Very between different states, materials, and builders. I would recommend you shop around as intended and enjoy the process. Just make sure and plan accordingly or it can be very stressful. (i have built) (less than 10% increased price per Sq ft) Last bit of recommendation, don't fall into the "Price Per Square Foot Trap". A building will often estimate by ppft^2 however, the materials and specs mean more. Have an "As completed" appraisal done and that will give you the true value. (the lender will require it anyway on a new construction) Hope this finds you well, Thank you, Tim

Answer 3

You need to fix your credit first. If not, no bank will give you a loan, and if they do, the interest rate will be brutal.
Start by only spending on items that you actually need, like food, and don't rent movies or buy fast food or subscribe to extra channels or whatever you might be doing that you don't realize you're doing.
Then if you have a checking account, do NOT overdraw it or play the "float" (when you write a check on purpose when you know the money's not there in hopes it won't be cashed the same day).
Pay more than the minimum payments on your credit cards and pay them off as soon as you absolutely can.
If you subscribe to the internet, remember you can use it free at a library! make a list of all the little things you can save money on, and it will really add up.
Good luck.

Answer 4

Bad credit is OK in many cases. The lender is not worried as much about the past as they are of your ability to repay the mortgage loan in the future. Basically, if you've had credit problems in the past, the mortgage company will look at those problems and ask the following questions:

a.) How far in the past are your credit problems? (i.e.- if you had how to properly price your home and factor in market conditions on your credit card this year, you might not be able to obtain a loan)

b.) If your credit problem is in the past, is it likely to recur again?

c.) Is whatever it is that caused your credit problem gone, or is it still present today?

d.) How good is the probability that you will pay your bills faithfully every month from now on?

So, if you've had bad credit, don't let it keep you from applying for a loan. Even in the worst-case scenario, a good lender will never say no. That's because, it's not a question of IF you qualify for a home loan; it's a matter of WHEN you can qualify. This is why you should apply no matter what your credit situation.

CREDIT SECRET #1 - Improve Your Score by Paying on Time

There is no substitution for paying your bills on time. Even if you have made payments late in the past, make every effort to pay on time every month, especially in the 12-month period leading up to your loan application. This can dramatically affect your credit score.

CREDIT SECRET #2 - How Accurate is YOUR Credit Report?

Did you know that more than half of American adults have inaccurate or outdated information on their credit reports? These errors can cost you thousands of dollars and could even keep you from getting approved.

How much incorrect information appears on your report? It is imperative that you get a copy of your credit report as soon as possible so you can find out. At the bottom of this report, we will show you how you can obtain a Copy of Your Credit Report, at no cost to you.

CREDIT SECRET #3 - Don't Touch Those Accounts

Old Accounts: If you have old, unused accounts on your credit report, don't close them before applying for your mortgage loan. One of the factors that affect your credit score is the ratio between your credit limits and how much you owe. Closing accounts will make this ration go up, which can severely impact your credit score.

New Accounts: Don't open any new accounts in the months preceding your mortgage loan application. New accounts can affect your credit score in a negative way for a number of reasons. The main reason is that every time you open an account, they are required to pull a copy of your credit report. If you pull a credit report too many times in a short period, this will make your credit score decline. Just say no to new accounts!

CREDIT SECRET #4 - Know Your Credit Score

When someone speaks about your credit score, they are talking about your three-digit FICO score. This score ranges from 400-850. The higher the number - the better. It is important for you to regularly check your credit score. This is why we offer a NO-COST Credit Report. If you pre-qualify for your home loan with us, we'll give you a copy of your credit report and score at no cost to you. And unlike those no-cost Credit Report offers you see on TV, there is no obligation to sign up for any programs.

Depending on all of the above, you do have a chance at the Amercian Dream and if for some reason you do not qualify, we will show you how to get back on track so 12 months later you can.

Kindest Regards,
Darren Meade

Answer 5

You can if you have someone co-sign who has good credit (meaning they will take responsibility for the loan if you fail to pay it), or if you offer something with sufficient collateral. However, since you don't own a home, and it's unlikely that you own a car which is worth as much as the loan you wish to take out, you may have trouble.

If you offer collateral, you can usually get a loan, but you may need to start with a smaller loan, and pay it back to increase your credit score, before you can get a large enough loan to buy a house.

Answer 6

Yes. My husband and I had horrible credit and thought that it was hopeless. His mother co signed and we got a very good interest rate on a 30 year fixed first time homeowners loan. Unfortunately it is really hard if you don't have a co signer, but you can do it with a decent down payment. You may have a high interest rate, but hey you can refinance when your credit is better and have a little peace of mind knowing that it is your home. I hated renting. Good luck!

Answer 7

Nowadays, yes. The problem is, you are going to end up paying higher interest rates.

My best advice to you would be to spend about 6months working on improving your credit. Paying off bills, lowering credit card limits and paying ON TIME!!

Usually after showing improvement for about that amount of time, you can check your credit score again and it may have gone up. Then you can try again to get a loan.

Answer 8

I'm a realtor and I have never seen anyone with bad credit buying a house unless u can put at least 20% down. You need to have a credit score of at least 600

Answer 9

Hi, I'm a Realtor. My ? to you is that do you know your FICO Score is, or how bad your credit is? Have you had bankcruptsy before? what State do you reside right now. Let me know, maybe I can help you get the property you dream of. By the way, my name is Don. Have a nice day.

Answer 10

I could go on and on, but you need to find a house the owner wants to sell, work out a land contract.