If i settle all debt on my credit report how long before i can buy a home with no money down?

Answer 1

For "full doc" loans, where you show your w2s or tax returns to verify income, most lenders right now require a 620 mid score or higher for 100% loans. The three credit bureaus, TransUnion, Experian, and Equifax, all have a score. Lenders usually go off of the middle of the three scores. As long as your mid score is a 620 or higher, you can get a loan with no money down, as long as your debt ratio is ok. They will take your monthly payments + your new house expense (based off of your new rate and loan amount) and divide that by your monthly income. If that number is less than 50%, your debt ratio is ok. If your debt ratio is low, you don't need to pay off debt.

If you are talking about paying off collections or charge-offs on your credit, you may not have to do that either. Most lenders ignore collections over 2 years old and ignore medical collections altogether. If they are recent, then they may have to be paid to get the loan. All lenders differ, but most will allow up to $5000 in open collections in the last 2 yrs to be left open. So, you may not have to pay collections, but you might.

So, if you have a 620 mid, have a debt ratio less than 50%, and don't have many collections in the last 2 yrs, you should be able to get a 100% loan (no money down) fairly easily. There are other factors though, such as the property, job time, bankruptcies or foreclosures, past mortgage or rent history, etc. that may affect your ability to get financing. (FYI. If at all possible, you should not do consumer credit counseling. Lenders usually look at this like a bankruptcy, and you can do the same thing they will do yourself.)

Just remember, the less money you put down, the higher risk to the lender, so, the higher your rate.

Most lenders will allow the seller to pay up to 6% of the sales price towards your closing costs, but some sellers won't pay. So, even if you get 100% financing, you still may have to come to the table with closing costs, which can be thousands of dollars.

Answer 2

It is virtually impossible nowadays to get a mortgage loan with no money down, especially in the current market conditions. But, settling all your debts is the right way to go since it will cause your credit score to go up by some extent. Ultimately, the big money saver is that the higher score will help you get a much lower interest rate on the mortgage than what you would get right now. As for the down payment, it will also be lower and more manageable.

Answer 3

Some owners have rent to own. But, regardless - just start fixing the credit scores and seeing if there are things in your report that are over 10 years old and if there are - INFORM the credit places to remove those old items off. They are not suppose to have them on your credit report after so many years. Also remember anytime you apply for a credit card or credit, points go against your score. Start saving money in the bank...it will be hard to not want to touch it, but if you have enough money down - some places may be willing to work with you. It may be at a higher interest rate, but you can re-apply in a year or so and get a better one, once you start establishing your credit again. Good luck, I'll be crossing my fingers for you. (I sorta miss just renting at times.) I am starting to hate all the things I find myself having to do around my house.

Answer 4

This question could have many answers depending on your specific financial situation, the housing market in your area, your FICO /credit history, value of home, etc. Within recent weeks more emphasize is being placed on lower loan-to-values, i.e. more down payment, reducing the amount financed. Having credit card debt does not eliminate one from purchasing a home. 80/20 types loans are not likely to end soon, so that may be a viable option without completely knowing your situation.

Answer 5

The question is not whether you can buy a how, it should be how much you can afford. Decide on what price range you can afford and work backward from there.

Your interest rate can range from 8.5-10% with rough credit to 5.8% with good credit. The state where you are in can factor in to the rates as well. Play around with the different loan websites to see what is out there.

I use bankrate.com as a tool. E-mail [e-mail] for a list of foreclosures in your area.

Good luck.

Answer 6

To obtain a mortgage with no money down is available to veterans only at this time. To answer your question about credit report debt, good credit (if not over-extended) is not a bad point. You need to know your credit score. Good luck.

Answer 7

Get the receipts or proof of zero balance or payoff's of whatever outstanding or over accounts you have, submit them to a lender, have the lender do a rapid rescore for you (it will cost $100-$150 I think, and will take around a week or two).
After a few weeks, talk to that lender about having them approve you for a loan. (There still are do-able loan programs out there) But If your credit score is super bad, like 600, I don't know if any of my advice will help.

Answer 8

Bad stuff stays on your credit report for 7 years.

Good stuff stays on for 10 years.

Answer 9

if your credit has been really bad for any amount of time and your in arreas or have ccj's regardless of clearing all debts it could still take up to 6 years to clear and have a credit history!. your best bet is speak to your local citizens advise