Bad Credit, Can I buy a house? What are my options?

Question

I'm 26. I've filed for bankruptcy twice (discharged once, dismissed the other time due to paperwork not being filed on time). I have a really bad rental history (with evictions), not proud of it. I don't have any credit cards (never have), so I have absolutely no credit. I've never owned a car. I do have a stable job (3+ years), and I've had a long, GREAT working history with reliable references.

I've heard sometimes it's better to buy a house than to rent an apartment with no hope of ownership.

I really want to get my own place, I've gone to credit counselling, and I'm now in control of my finances. I have about $1000 to put down on a house, if need be.

Any suggestions? Is it possible to get a decent house in a decent neighborhood (single, don't want any crime or questionable area)?

Answer 1

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Answer 2

Well, based on what you are telling me, it will be very hard to qualify for a normal home loan with only $1,000. Just the closing costs will be more than that and with low or no credit scores, 100% financing probably isn't an option.

So, your choices could be:

1) Save up for a larger down payment. With 30% down, you can get a private lender (hard money) to finance the balance.

2) Build up your credit so that you qualify for 100% financing. Take your $1,000 and open 1 or 2 secured credit cards. Use them to charge your normal things like gas and groceries, then pay them off every other month.
Do this for a year and continue paying your other bills on time and you should be on your way to a much better credit score.

Answer 3

You need credit counciling to learn how to manage your self. No lender will look at your situation until you can give them a good reason to. You have evictions, a bankruptcy, no credit, no car (how do you get to work?) and generally are a lender's nightmare.

You are so young my dear. What has allowed you to get in this state at your age? You are not a bad person. But you have made some seriously bad decisions. Have you family to help you? A church that can help? You have a lot of needs, but debt is not one of them at this time. Your ego must be crushed with all that has gone on. And if I understand things (from other posts) you have a child on the way.

I applaud your desire to own a home, and to better yourself. Take things one at a time. You need to resolve your past in order to move forward. Any unpaid bills that you have not discharged in bankruptcy need to be paid. Start with the smallest and pay it off first. Then pay off the next with the money you were paying the on first, and add money to it. Repeat this with all outstanding undischarged debt and before you know it you will be in much better shape, restore some of your credibility, and your self esteem will rise too. Work on this first.

When you have this mastered, you may want to look at a 2 bdrm condo as there is no exterior maintenance to do, just interior. There are loan programs that are available but you need to get in position to qualify for that first. Paying the bad debts will help. Any recurrign bills that you are paying can be used to establish payment histories, usable to qualify for a loan. A letter addressing your past histories well written will also help. Don't place blame, take credit for your share. Tell the truth, it makes a better story and you can answer truthfully if questioned without having to make it up as you go.

Why don't you go to a local bank and see if they will be able to direct you to a credit councilor? They will guide you far better than this forum can. You have specific needs that require personal attention. If you want to write me I'll try to help you.

I've been bankrupt, lost a home, business and thru divorce yrs ago. Life is hard enough when things go right. You have lived a lifetime so far, and I sense you want to improve things. My best to you and I admire your effort. But you need real advice and help.

Answer 4

You really need to rent until things are sorted out. $1000 is not even enough to pay your closing costs. You need to apply for some credit cards and use htem responsibly to build your credit....


how did you go bankrupt without ever owning a house or having credit cards? That seems odd.

You need atleast a score of 580 to get anywhere in the home buying process. Use that $1000 towards an extra deposit on your apartment and get your stuff in order.

Answer 5

If your middle score is at least 580 you could qualify for 100% financing. The seller can pay up to 6% of the sales price towards your closing costs (this could potentially cover all your closing costs depending on the sales price). You can use your $1,000 for the earnest money and appraisal.

Rick Lanicek
www.primelendingonline.com

Answer 6

Your ideas are 0 until you get your credit rankings under administration. except you have a co-signer, you will no longer receive a private loan on your guy or woman with unfavorable credit rankings. It makes no distinction if the valuables is a foreclosure or a fixer greater. you will no longer have the skill to borrow funds until your credit rankings point out which you're a sturdy credit risk. That your dad and mom refuse to co-sign is a splash to me which you nonetheless do no longer cope with your funds precise.

Answer 7

While you might be able to find a lender who will work with you, you're going to pay insane interest rates. Your payments could be twice as high as someone with decent credit. This will only compound your problems. Keep renting for now, pay down your debts and save more for a down payment. $1,000.00 won't even cover closing costs on a dump.

Answer 8

it's better for you to wait little bit and work towards reestablishing your good credit. if your credit is good you will qualify for 100%financing in the price range you can easy afford.

Answer 9

read this book. it depends where in the US u live but if you dont mind living out of places lik e NY, you have a good chance of a free house.

Answer 10

read tips on debt/credit, scores and loans on this site