buying a house with poor credit.?

Question

My husband and I dont owe back any money anymore, but when I got pregnant with my daughter at 18, I really didn't understand th whole credit issue, got credit cards took years to pay them off, and even went into debt many times with regular bills, (all caught up now) any how we now have two kids and want to buy a house, can we do it or is it a waste of time trying. How can we do this?

My husband has a well paying job, and I am attending college, (we are financially ok now, its just our credit.)

Answer 1

First off, don't even THINK of dealing with the scam artists who SPAM Yahoo! Answers. They can't even abide by the community guidelines so why would you EVER trust them with something like the major expense of a home purchase?

OK, down to some real advice that might help you in the long run.

While there are undoubtedly plenty of lenders who will happily rip you off due to your current credit situation it would probably make much more sense to take a couple of years to get your credit scores into the 'A' paper range. With poor credit you'll wind up paying up to twice as much per month for your mortgage payment than if you can hold off for a couple of years.

Right now, home prices are on the slide in many parts of the country right now and this can actually work in your favor. Prices may drop a bit more while you build up your credit score, saving you even MORE money in the long run. And even if they don't, we're not likely to see anything like the absurd inflation in property values that we did over the past couple of years. You might pay more for the house, but your payments would still be lower with the lower interest rates.

I've been down that road in the past -- paying way too much for the money due to bad credit. The home I live in now cost nearly 3 times as much as the one I bought years ago with bad credit but my payments are 25% LOWER than they were back in the bad old days!

Do yourself a favor and save the difference in monthly costs towards a down payment for a couple of years and let time work its magic on your credit score. You'll be VERY happy that you did in the end.

Answer 2

It's great that you pulled yourselves out. Congratulations!

Bad marks on credit history are given less weight the longer ago they are. Being three months delinquent now is a whole lot worse than being the same three months delinquent four years ago.

A lender might charge a higher rate because of the history. This would in turn limit the size of house that you buy. But owning your home is still a good idea. Go with it. You can always refinance in a couple years when you have a couple more years of good history on file.

Answer 3

Get your credit in better shape, save 6 months worth of living expenses, and have 20% down before you think about buying a home.

Lot's of people "Just had to buy a home" in the past 2 years and many are now regretting it.

Why?

They did NOT anticipate the extra expenses associated with buying a home. And "everyone" was getting rich buying homes and selling for a fantastic profit.

This is NOT 2005 anymore.

Homes are actually going DOWN in price as people who bought for speculation have to sell because their plans of appreciation are NOT coming true.

In this environment you need to have an extra safety blanket.

Answer 4

Every situation is different so the leders have guidelines but in todays market most lenders look for a bigger picture.
If you have a credit score over 550 or close and you can provide proof of your income you guys will be able to qualify.

The process starts by speaking to a loan officer who will take the time to review your current situation and sometimes within 60 days you can get your credit situation fixed.

Best advice is buy your property now, if possible with a 5 year fixed loan with no penalty, so when your credit has imporved you can refinance and go on with your financial life with a much clearer picture.
If you need additional assitance give me a call the consultation is free I am a loan broker in California but I lend money in all 50 states. 714 270 3282

Answer 5

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Answer 6

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Answer 7

I can help you out if you would like. I work for Citibank which is one of the largest financial institutions in the world. Unlike a lot of banks, we aren't just credit based. We look at credit scores, rental or mortgage history, job history, assets, income, downpayment, and property type. If you would like more help feel free to contact me. Happy hunting!!

Answer 8

Please don't go to those in here spamming for business.

Talk to a few local lenders in your area about getting pre-qualified. This will give you an idea of where you are at credit score wise. Be sure to compare everything (not just interest rate) to avoid lendee regret.

Do you have any money for a downpayment? If not, start working on that too.

Good luck!