the best loan for first time home buyer with bad credit?

Question

can anyone tell me the best loans out there for first time home buyer with bad credit 500-586?

Answer 1

The absolute best would be an FHA loan. There is no minimum credit score, great rates (6.00-6.5% today), and you only need 3% of the purchase price into the deal. That 3% can come from a gift, grant, even some seller-funded grant programs, and you can literally buy with no cash of your own.

To qualify for FHA, you typically would need at least 12 months of clean credit, so if you have old bad credit, it's ok if you've been on time for the past year. Having a verifiable rent history is vital to any offer you could get, so make sure it's available and paid on time too.

If you can't go FHA, you're likely to end up in a subprime loan with rates 2-3% higher, punitive prepayment penalties, and a rate that would adjust even higher after 2-3 years. Avoid this at all costs.

Answer 2

There are no *programs* to make your credit better. And, any company offering to fix your credit for a price, is just going to rip you off. In order to get your score up, you need to either make some settlements with those medical bills you have if they are not too old, or, re establish some credit by getting a secured credit card if you can. There are no bank mortgage loans for those who have poor credit. Those left the building in 2007! The only other thing you could do is either find an owner financed property or a lease option/rent to own property that will give you a 3 to 5 year lease to clean your credit up and then try to secure a loan.

Answer 3

500 -586 is a wide range.

A 500 score will probably not get approved for any mortgage unless you can prove a very good income. And even then, they will consider you a awful credit risk and probably charge you upards of 10%.

Closer to 586 is poor, but not awful. You most likely could get approved if your income is steady and dont have debt flowing out your ears.

I think you should work on whatever is hurting your credit. You will be amazed how fast you can correct your credit score if you do the right things to help.

You could be pushing 600 -625 in a year easily, and then you can get a much better mortgage.

Answer 4

Wait two years and get your credit up! Pay your rent and utilities on time or early and pay off ALL un-secure debt (credit cards/personal loans). THEN go to multiple banks and see who will offer you the best rate.

Good luck, but fix that credit first!

Answer 5

I assume you mean 0 down?

There aren't. 580 as a middle score will get you a 0 down loan (but it will be an 80/20) with an average interest rate of 7.5-9%.

Fix your credit first.

Answer 6

Shop around and see if banks in your area have grants for first time home buyers, most will and a lot of them will be released later this month. Shop around. Whatever you do don't get sucked into ARM (adjustable rate mortgages). You will get screwed in the long run.

Answer 7

Wow! your credit is awful. expect to get a very high mortgage rate because the banks know you won't pay your mortgage and this is a way of compensating them for the tremendous risk that you pose. After a couple of months of default, the bank will then foreclose the house and become the new owner thanks to you. Then they will resell it for a profit to the next person and so on.

Answer 8

You can instanly get a cash payday loan as much as $1000 applying this service: http://loans.servermatrix.org I obtained my payday loan although I have a very poor credit score.

Answer 9

Many banks will offer no down payment loans for poor credit, you have to just shop around and see what they'll pre-approve you for.

Answer 10

Bank of Mom and Dad...