What is the process in buy ing a house and with bad credit?

Question

I have never owned my own home and wouldn't know the first thing about the process. What kind of down payment, what kind of credit, what are the first steps, etc.

Answer 1

As a first time homebuyer, you have some options. The Ideal situation is to have a credit score of 720, a down payment of 20 percent, you can fully document your income. However there are programs for people with bad credit as well, and if you can't do a down payment, you can get 100 percent financing. In the mean time you can find out what your credit score is, find a broker and see what kind of loan you can get approved for.

Answer 2

I will make it simple: If you have a credit score of 620 or higher you can get a 100% loan in most cases via the My Community first time home buyer program. FHA will allow even lower scores, and really isn't credit score driven as most all other mortgage loan products. But, you have to have a stable and sufficient income, some history of saving money over and above your current housing expense, and depict a positive ablility to handle credit now, in spite of the prior difficulties, which you have basically overcome. FHA will even forgive the older, two years plus, collections and permit you to make new arrangements with current collection accounts. The key is proving that the situation that caused the credit problems is over and that you can now handle your credit. You can also find a seller that will let you lease to own and give you a year, two and/or more in which to actually buy the property, and at a agreed upon price, that will let you establish some equity during the lease period. Then you can obtain a loan by using the higher value of the property as the lender will base the loan of the value then, as opposed to the purchase price, which should be lower. They will treat it like a refinance. But, the first thing is to know your credit score and work with each creditor to improve it. Remember also that loans over 80% require PMI, and FHA loans require MIP, which insures the lender that they will not lose money in the event that you lose the house via foreclosure. You probably should call a couple or three mortgage brokers/lenders and discuss everything with them and compare notes. Hope this helped and good luck.

Answer 3

I just went through this. I close next week on my loan. Woo Hoo.

Basically just go look for a house you like. Then find a lender.

Some mistakes I made were:
-I signed a purchase agreement prior to getting my loan approved. I was pre approved but that isnt the same thing.

-I shopped around for a lender to get the best rate. The problem with this is every time they run your credit report your score goes down. So I had 5 Inquiries which dropped my score 640 to 615. which in the end cost me a lot of money.

-What ever you do, try to get out of PMI (insurance). This is an insurance you have to pay if you dont have 20% down.
You can do this 2 ways, have 20% down or take a 2nd loan for the 20% down (at a higher interest rate). Which most people do. The reason for this is because with PMI you lose that money. You are paying for nothing. You may as well finance your house at 80% first loan and 20% on the 2nd. At least you are paying for 100% of the house.

I went through a lender. In the end that was the best for me. I tried my back but they have huge fees and high rates.

Answer 4

A - you must have a steady job
B - the type of loan you get will be in direct proportion to how bad your credit is.
C - Clean credit Will get you the most attractive deals but I would consult with a reputable mortgage company in your area and let them tell you what kind of program is out there for you.
D - After you spoke to the lender and according to what he says you then contact a good real estate agent and let them know what the lender said about what type of program you qualify for and what you can afford.
You can expect to pay closing costs along with any down money for the mortgage. Closing costs usually consist of title insurance, a homeowners insurance policy, real estate transfer tax(if state applicable) any association dues or transfer fees if in a planned unit development. Your realtor can guide you in these matters

Answer 5

valuable you could. i bypass to assume which you have cured all your surprising debt and your decrease back heading in the right direction to rebuilding your credit. in case you nevertheless have lots of debt, you ought to look into paying off your expenses first. taking over yet another super debt isn't clever. So.... There are 3 information on a thank you to purchase a house with a bad credit score. a million. you need to purchase a house utilizing a no longer elementary money Lender. you will ought to come again up with around 30-35% down fee and pay a extreme fee alongside with extreme fees, yet they lend on the valuables, and your skill to re-pay the non-public loan, no longer plenty your credit. you will ought to have the skill to refinance the valuables everywhere from 12-36 months, so because it incredibly is why you ought to commence re-construction your credit now. 2. There are nevertheless a pair sub-best lenders obtainable and you will ought to place 20-30% down and teach an skill to re-pay the non-public loan. 3. probable the main inexpensive thank you to get right into a house is to do a lease purchase or lease selection. you will pay an upfront selection fee of around 5% and do a lease term of 36 months. You restore your credit and on the top of the 36 months you exercising the acquisition/selection by refinancing the valuables and paying off the owner. those are your ideas, oversimplified of course, yet you're able to do it. stable success

Answer 6

your credit ratings is the most important thing in the process of getting mortgage- if it is bad , you will pay higher interest and they will ask you to put more down payment or deny you credit.
they will also look in your work history& rent history.
you will need to prove min. of 2 years of steady job in the same field and because you are the first time homebuyer,you will be ask to prove your rental history by min. 12 canceled rental checks ( there so many programs available, buy i give you just general idea).
the best way to obtain your mortgage is to improve your credit score before you will apply for one.
with good credit you have access to more programs to suit your needs. with bed credit ,you don't have those options.

Answer 7

It is extremely difficult for those with poor credit ratings to find financing to purchase a home. The recent wave of foreclosures has caused lenders to considerably raise their requirements for qualification.

If you credit score is below the 625 mark, you might have a chance, but the rates will be enough to scare you away.

Answer 8

There are hundreds if not thousands of websites on the internet enumerating the ways to apply and receive home loan when you are plagued with bad credit issues. These sites help consumers with bad credit scores to increase the viability of their existing credit scores and set up loans regardless of their credit history.Companies that specialize in bad credit home loans; usually offer a wide range of options for consumers with bad creditBad credit hasn't stopped them from purchasing a home. There are several programs available for people with bad credit that helps to restore their credit status and to live debt free lives.

Answer 9

Have you thought about why you want to buy a house? Do you know why you have bad credit? When you figure out the important why then you will figure out how. Perhaps you can find a seller who wants to finance the sale of their property.

Answer 10

The first step should be to call a mortgage company. Try to get a referral from someone you know. He/she will pull your credit report (ask for a copy) and help you determine how much to spend, etc...