IF I HAVE VERY BAD CREDIT BUT I HAVE $20,000 DOLLARS TO PUT AS A DOWN PAYMENT ON A $185,000 HOUSE CAN I DO It?

Question

I HAVE 1 &1/2 YEARS TO BUY THE HOUSE THAT I AM LIVING IN OR THE MONEY GOES AWAY. I DONT HAVE GOOD CREDIT AT ALL AND SOME OF THE THINGS ARE RECEINT( LATE PAYMENTS,NON PAYMENTS, CAR REPO. ETC) CAN I GET A LOAN WITH BAD CREDIT IF I HAVE 20,000 DOWN PAYMENT?

Answer 1

From your description of the situation, this sounds like a rent to own agreement where a part of your monthly rent would be applied as a down payment if you decided to purchase the home. If this is true then what you would want to do is take the next year to do everything possible to clean up your credit. You need to maintain a strict budget, work out payment plans with your creditors and see if they would be able to reage the account if you meet certain criteria. If you can do this then you may be able to raise your credit score and have some of the negative reports removed. As a lot of people have mentioned the rate that you may qualify for might be very high, but you might be able to get in with a lower adjustable rate mortgage to start. If you choose this option it is very important that you continue to work on your credit during the period that your mortgage is locked at the lower rate, that way by the time the rate begins to adjust your credit should be even better. If you can commit to that then you should be able to refinance into a lower fixed rate mortgage. You really need to sit down and look at your monthly expenses to see what can be cut, and to see if this is feasible for you to try.

Answer 2

Maybe. 1. It depends on what you mean by bad credit. In some cases you will not qualify for anything but a hard money loan if you have certain types of credit issues. 2. A big down payment might only be 5% or 10% more than what you would put down if you had good credit. Note that the days of 100% loans are rapidly closing given all the problems with such loans. 3. You can some times get the seller to take back a second. The new lender in 1st position sees the second from the seller as similar (not exactly the same but similar) to your down payment. Hence you might not be putting up that much extra. I am not saying that a seller suppled second makes sense as each deal is different. 4. On a tangent you might be able to do something to improve your credit before taking out a loan. Get all the mistakes removed. See if you can negotiate a settlement for the items that are negative and accurate. Included can be an agreement to have the negative marks removed if you pay up. 5. If you have someone who trusts you and having them provide a guarantee that you will make the payments or they will step in can work. It might be best that you delay buying until you sort out a few things. If you are in a market with falling or flat prices you are not really risking much by delaying. Buying is not the right decision for all situations. If you are not planning on staying 3-5 years it could cost you more to buy compared to rent. There are real costs to buying and later selling which you might not recover.

Answer 3

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Answer 4

$20,000 is just over the magic 10% down payment, but I think you can find financing. You will pay a high interest rate so be prepared for that. Talk to a Realtor (not a real estate agent). Ask for a recommendation of a mortgage broker. The way the housing industry is going right now, you should find financing without much trouble. The slower the industry gets, the more anxious they are to lend money.

Answer 5

lower your expectations or you will not only lose the house but the $20,000 dollars and any and all money paid because you will not be able to keep up the payments and it will be foreclosed on.you have 2 options.you can take the money and clean up your credit report or take the money and use as a down payment on a cheaper more affordable home but don't get sucked into a bad loan!!! many people are losing their homes because of tricky loan officers.if you have to wait.just do not be a fool good luck.

Answer 6

Don't lose hope if you're looking to buy a home. There are so many different ways to fund a home now, just about anyone with any kind of credit can get into a home, regardless of credit situation.

Of course, some will cost you more money in the long run, but a home it's still one of the best investments that you can make, so, in many cases, it's worth it, especially for the first year of ownership.

You should shop around, and ask different lenders what kind of programs they have, and if they can help. Try to find a lender that specializes in bad credit mortgages. You can find some bad credit mortgage lenders listed on this page on and off:

http://www.axalda.info/bad-credit-mortgage.html

Answer 7

As has been written already, the interest will be hard to take, but if your credit is already that bad and you're that keen to get a house, I'd take any deal I could get. That way you'd have reached your nadir and be able to build on something.
But if you've got an ounce of patience, rebuild your credit before you bury yourself in un-needed finance charges and the like. I stopped myself from doing it by imagining the rep of the loan company was complaining that my payment barely fills up his hummer.

Answer 8

If you have recent negatives including a car repo, late payments, and non payments. it seems very apparent to me that you absolutely cannot afford to live in this home now. How will you manage when you own the place and still have all your current bills, plus that big mortgage payment, and all the money needed for routine repair and maintenance to the house.

Use the $20K to fix your credit and start living within your means, including finding a place to live that you can afford.

Answer 9

Wouldn't cleaning up your credit with that money make more sense??? Highly unlikely when you have had reposessions. Especially right now, it is really hard for even people with good credit to get a decent loan.

I'd take that 20,000 and pay off your debt and start fixing your credit.

Answer 10

Probably not because the bank still has $185,000 at risk. You still have 1.5 years to clean up your credit and pay your debts. Nobody in their right mind is going to loan you money when you stiff your lenders for the money you borrowed.