I want to buy a new house in the next 6 months...?

Question

but my credit is not very good. I had a bankruptcy 2 years ago (when I got divorced) and my credit has been shaky because I haven't been getting court ordered child support. Now that I am finally caught up, I am paying things on time and I can afford to buy a house, but I am worried that my credit won't be good enough. What are some things I can do to increase my chances of getting pre-approved for a home loan in the next 6 months?

Answer 1

FNMA & FMLC require that you not apply for a home mortgage until 24 months from your FILE date, not your discharge date. You need to pull your credit report and find out what your median credit score is. Bank of America wholesale has a product that will offer you 100% , if needed, as long as your income does not exceed 48K per year. However you do have to have a minimum credit score of at least 620. Review your credit report for inaccuracies of any sort. If you have small charge offs or collections, pay them off quickly and ask the collectors to report your account paid. This will improve the score so that you may qualify for the program. You can also ask your mortgage broker to see you can qualify for a My Community Mortgage.
Good Luck! and if you'd like more info email me at [e-mail]. I'd love to help!

Answer 2

Unfortunately, that bankruptcy will stay on your credit report for 5 more years (all records stay on the report for 7 years and then are removed). Even if you were to go in on a house with someone with stellar credit, your credit score will drag down the total, making it difficult to get a low-interest loan that doesn't require a huge down payment.

The only thing you can do is wait the 5 years until your record is clean. Over that time, put whatever excess money you have each month away into some kind of money market account to save up for the down payment. Five years from now, housing shouldn't appreciate in price very much. And, any loan you get now with your poor credit (if you can even get one) will probably be at a higher interest rate than what will be available 5 years from now.

Also, keep your borrowing nose clean over the next 5 years. Something that seems insignificant to you (late payment on a bill, bounced payment check, etc.) might adversely affect your credit score. And, it will stay on the record for 7 years.

Answer 3

You still have a lot of options. The first thing you want to do is get in contact with a good mortgage professional: you can do this either at a bank or at a broker's office, but in your case I'd recomend a broker. Banks have limited options and if you don't fit into their guidelines, there is nothing they can do.

Brokers usually have access to more types of programs through direct lenders. Aside from that, most (good) brokers will help you determine what long-term plan is best for you in order to earn your business when you ARE ready to buy. I have personally done that quite a bit - the client and I will sit down and discuss goals and timelines, we will pull a credit report and go over it together (the company I use has some great credit repair tools built in to my service package) and then set a realistic timeframe for the whole purchase.

The trick here is choosing someone you like and trust. Visit some local brokers in your area, and remember that you are interviewing THEM. Make that very clear up front and you will get a better idea of who will help you, and who is only looking for an immediate file. There are still great and honest brokers out there, but like finding a good mechanic, you have do do a little research to find someone you like. My goal as a broker is to gain customers business for LIFE, and there are a lot of others out there with the same idea.

Good luck, and remember: this is YOUR life and you are the one in charge. :)

Answer 4

Unfortunately, the shake up in the sub-prime lending market is likely to prevent you from owning a home in the next 6 months.

But, there are things you can do. I have heard good things about a law firm called the Lexington Law Group http://www.lexingtonlaw.com/.

Keep paying your bills on time and keep trying to get the court ordered child support that you are entitled to.

Saving up as much money as possible. Zero down loan programs are a thing of the past.

You may also want to look for a contract for deed. This is where you contact to purchase a home from the homeowner and generally do not have to get a mortgage for a couple of years. That can give you time to save up some money and improve your credit score. But be aware, if you miss a payment, you can be kicked out within 30 days. Buying on a contract for deed is NOT like renting where you have to be evicted through a legal process.

Beware of lease-to-own and rent-to-own programs - they can be a big headache if the owner/landlord does not preform as promised and some states do not have adequate laws regarding these programs.

Good luck....

Answer 5

Unfortunately, the way the market is going, banks are beginning to crack down ferociously on the credit demands for mortgages and large loans. You may have noticed that the Dow has been fluctuating a lot (around 1000 points in the last month alone). This is because of the fact that people who have mortgages or large loan amounts are not paying their bill and defaulting on their loans. You will find it very hard in the next six months to get a mortgage until the housing bubble pops (which it is currently popping, and in the next few years will plummit).

Answer 6

First the best advice I can give you as a mortgage broker is to keep your revolving lines of credit, such as credit cards below 25% of their limit in doing so you can make you FICO score go up by as much as ten points a month.

Answer 7

Depending on what area of the country you're in, I can possibly recommend someone in your area to help you out. You can either find a "rent-to-own" deal, where your credit isn't as much of a concern, or you could possibly benefit from some credit repair too. [e-mail]

Answer 8

you will have to wait, and you SHOULD wait, work hard, save a much as you can to have a high downpayment.

have ALL other bills including car GONE.

THEN buy a house the big downpayment and a short term loan will make up for the appreciation that you MIGHT have missed.

besides right now houses are FALLING in value, not a good time to be a buyer OR seller.

Answer 9

Have a 20% down payment plus closing costs, if not the way the market is at present your chances are slim to none

Answer 10

You need to work hard and continue building your credit and saving.

Although it is POSSIBLE you can get approved, your interest rate will be horrible, and you will end up paying much more then you should.

Just wait and rent until your credit improves.