First time home buyer, I don't have good credit. Can I still buy a house?

Question

I would like to buy a house and I don't have good credit, can I still attempt to buy a house. This would be my first time buying a house?

Answer 1

Depends on your how bad your credit is and why your credit is bad. And it's your credit score they are really going to be looking at as well as how much debt you currently have. I would suggest talking to your mortgage person at your bank and getting their help. I would also suggest not applying for anymore credit until you are applying for a house because everytime you apply for credit it hits your credit score. Also get your free credit report, if you haven't already, and check it carefully to see if there are any discrepancies on it and write explanations for problem areas. Once you start looking for a lender, be very careful where you go. There are a lot of bad lenders out there. And make sure to get a fixed loan not an adjustable rate mortgage. I did that with my first house and boy was that a mistake. I almost lost my house because my payment got so large it was very hard to handle. Check out your local information on whether the city gives special allowances to first time home buyers as well. A lot of cities or towns will have a program in place to help with the down payment and things like that.

Answer 2

I would definitely talk to a credit expert and fix your credit before you pursue buying a house.

Here is an example of what can happen in today's market if you buy a house with poor credit and no money down:
You will get something like a 7.99% APR , 2 year ARM (adjustable rate), which will increast to 12.99% in 2 years.
In 2 years, you may not be able to afford the new payment at the higher APR.

Because it is such a buyers marker, you may not have any equity in your home in 2 years. Even if you have 5-10% equity, no lenders will lend you any more money because of your credit.
Lenders that were lending up to 100% equity are out of business because of all of the foreclosures and you could be forced to foreclose if you can't afford your payment and noone will lend you money.

If you decide not to take my advise, make sure you talk to a lawyer or financial advisor before you sign anything. If you foreclose in a couple of years, the chances of you owning a home on your own after that will be slim.

Good luck.

Answer 3

Yes, you can still buy a house. But you will not get a very good deal or interest rate, and you will have to settle on something that is not likely going to be the house of your dreams. You had better be 100% positive that you can financially afford to do this before you even try, otherwise you'll be killing your credit for the long term. That said, if you CAN pull it off, it will HELP your credit if you pay your mortgage on time every month. NEVER be late. Get a fixer-upper, and take the time to improve it, and you may even make a profit off of it. I recommend going to your bank or credit union and discussing this with a financial expert before you proceed. A house can be a big boon for you, and now is the time to get one as far as the market is concerned... but if you are not really ready to handle it, it will be like tying an anchor around your neck and swimming. Seek professional advice!! Good luck!

Answer 4

My girlfriend and her husband bought a house with questionable credit. She went to many different places and finally found someone who helped them. Bad news is it was an adjustable rate mortgage, her payments were $2000.00 and rising. She lost the home. So many people are losing their homes right now. You should try, but don't be discouraged because things should get better in a couple of years. This housing problem that were seeing can't last forever. Just work on cleaning up your credit score it will save you money in the future.

Answer 5

I would suggest to repair your credit first. That way you won't be a target for those lenders who want to take advantage of people who want a house to call their own but really can't afford the choice that is given them. Yes, there are first time buyer programs but you have to be careful. Some lenders want you to have a Interest only loan and that is not a good deal for you. Interest only loans come with a big balloon payment at anytime and if you are not prepared you will lose your home.

Answer 6

If you have bad credit and collection accounts not paid off that last thing you should be doing is looking into buying a house. The timing is not good. yeah, it would be nice to take advantage of the 8k credit. To qualify for a loan you should have at least 10% of the purchase price saved up, at least 720 score, and have at least $3000/mo in take home pay.

Answer 7

it will depend on what your credit scores are. Yes it is possible, but the lower your credit scores, the more down payment you will need. Talk with a trusted loan officer to pull your scores and give you a gameplan to buy in the near future if you can't buy now. http://www.choicefinance.net/

Answer 8

It can't hurt to try but the credit markets have tightened up a lot in the past few months.

You may be better off renting for a couple of years all the while trying to improve your credit.

Answer 9

maybe? theres lots of things you can get help with as a first time buyer, it just depends what all help you get. and also how much you make vs. the price of the home. just call around to banks and ask them what all they can do for you.

Answer 10

i would say 1 month ago it wouldn't be a problem, but with the # of foreclosures on the market it may be tough. Best is to ask a bank what you can afford or what they will loan you.