Bad credit, no down payment, great income- how do I get into my first home?

Answer 1

First, you must find out what your credit reporting and credit scores is like...correct any negative or incorrect items on your reporting from the three major credit bureaus.

Second, pay down your high credit account and pay all your bills on time (on time is one week before the due date).

Third, save money by putting it into a high interest bearing account (Money Market, you can buy this with your bank). This is great for emergency or you can use it as a down payment on the house. If you're, a first time home buyer you will need to save 20% of the home value.

Once your credit is taken care of, you should be able to get a home loan...look for a fixed interest rate only and stay away from variable and interest payment only loan.

Answer 2

Do what hirebookkeeper & Barbara say-- save for the down payment.

You don't want to do a zero down loan and then move in 5 years and have not equity. I also suggest, do a 15 year fixed-rate loan, build equity faster and it will only a little bit more than a 30-year fixed. Check out this site: http://ray.met.fsu.edu/~bret/amortize.html It is an amortization calculator, you can see the difference between a 30 year & 15 year payment.

I also suggest only purchasing a home that is only 20-25% of your GROSS pay. You will get approved for A LOT more but you don't want to be house poor.

I would check with a local credit union for a home loan.

Also www.daveramsey.com gives some great advice & forms for budgeting and personal finance

UPDATE: You can also ask to have a "manual underwritting" mortgage

Answer 3

You are headed in the right direction. Bad credit? You will pay through the nose with high interest rates. You must be on the job at least 6 months to a year ( or 2 years if you're self-employed) and currently cleaning up your bad credit.

Save money for a down payment, there aren't loans out there for "poor credit-no money down"...anywhere.

Stay away from online and tv ads for mortgages companies. Check around locally where you live.

Get into it, pay your "dues", straighten out that credit, then refinance that house in a couple of years to reduce the interest rate.

Home ownership is awesome!

Good Luck and Happy Holidays!

Answer 4

How soon do you want to get into that home? If you can wait a few months, you would do much better to try and clean up your credit first. If you do get a loan right now it's going to cost you (over the life of the loan) thousands, or more likely tens of thousands of dollars more in high interest, because of your bad credit. But if your willing to spend awhile (up to about a year, maybe less) cleaning up your credit, you should have no trouble getting a mortgage loan at a very favorable interest rate.

Answer 5

With a 580 credit score you can get 100% financing, so everyone is within range of getting a home. If your score is low, you can usually raise it to 580 with just paying your bills on time for a few months to a year. Save some money to put down and in a years time go for it. It's well worth the sacrifice.

Answer 6

Save some of the great income for a down payment.

Answer 7

you recognize once you pass to get a loan with no longer something down and/or terrible credit that your proportion cost would be astronomical. whilst lenders verify out your background they see debt to ratio earnings (how plenty you're making and what different expenditures are you paying on), and how easy you have made your money (in case you pay each and each month on time and not something is staggering). So I say in case you have great earnings repay all your debt and close a number of your debts, yet shop some open. Then sustain for 6 months or greater, (the greater down cost you have the greater suited for you of having a loan). i understand no longer precisely what you needed to hearken to, yet whilst your finding out to purchase a vehicle or a house it particularly is greater suited this way purely reason your cash would be decrease and your proportion cost so which you would be able to certainly start up construction your credit lower back up and not have that vehicle repoed or abode foreclosed on.

Answer 8

There are multiple programs available that provide 100% financing as long as your income can support it.

Here is some additional info. Hope this helps.

Answer 9

It depends on how you define bad credit. If your score is 580, you likely are eligible for 100% financing. Email me for more info.

Answer 10

Build home yourself with great income.

Have major equity in home when finished. [no or low labor costs]

Known in the trade as sweat equity.