How can we get a home with no money down, bad credit and debt?

Question

My wife and I both have bad credit, I had bankrupt. in 2001 (discharged in 2002) And I have about $25k way over due in student loans. My credit score is about 580. My wife has a credit score of around 520, she only has credit cards that were late. How can we get a home with no money down?

Answer 1

YOU CAN'T. AND SHOULDN'T.

This is the reason that all the subprimes are defaulting.

Do you really think (after reading your post) that you are in a position to take on a loan of $100,000 or more and be a good risk?

Not very likely.

Clean up your credit.
Pay off your debts.
Save up a substantial down payment (at least 10%, preferably 20%).
Save up an emergency fund in cash of 3 to 6 month's living expenses.
Then look for a house that you can afford.

Answer 2

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Answer 3

Your best bet would be to try for a Hard Money or Equity Loan. But to do this you would have to find a property that is in default and has a cLTV (combined loan to value) of 70% or less - in other words, your Loan Amount would have to be 70% or less what the house appraises at. Even then your payments are going to be high as Hard Money comes with a higher Rate (usually 10 - 15% depending on the lender). Make sure it's financially feasible to do so before you buy the house. If you can't afford it, don't buy it. Period.

As far as the person that posted about the 80/20 Loan - these crap loans are exactly why so many people are in default and foreclosure. That is a 100% cLTV loan and is a very bad move to make in today's market. What that means is that you are taking a loan out for exactly what the house is worth. If the market continues to drop, you end up owing more on the house than you could sell it for. They are usually 5 year fixed loans, and after the loan matures (after 5 years) it goes adjustable and the payments go through the roof. Several of my clients are loosing their houses for this exact reason.

As a result, 80/20s are hard to find these days. Most lenders are requiring a credit score of 700 or higher to get them and even then it's iffy. Only 2 banks of the 457 banks I represent still offer this program. The highest the rest are going is a 80/10 or 80/15 and again that's with a 700 FICO (credit score).

Answer 4

Good Luck. I'm sort of in the same boat. My credit score is 590 and I'm trying to find a mortgage also. I have been paying my bills on time and have money saved for a 5% down payment. I do have a bankruptcy that has been discharged for 2 yrs so my credit score is very low as a result. I make $62k a year and have been paying $1350 rent every month on time for the past 3 yrs!!! Even though my mortgage is likely to be the same or less than the rent I have been faithfully paying on time I have been told that it's impossible for me to get a home loan at this time.

Answer 5

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How can we get a home with no money down, bad credit and debt?
My wife and I both have bad credit, I had bankrupt. in 2001 (discharged in 2002) And I have about $25k way over due in student loans. My credit score is about 580. My wife has a credit score of around 520, she only has credit cards that were late. How can we get a home with no money down?

Answer 6

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RE How can we get a home with no money down, bad credit and debt?

My wife and I both have bad credit, I had bankrupt. in 2001 (discharged in 2002) And I have about $25k way over due in student loans. My credit score is about 580. My wife has a ...show more

Answer 7

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RE :How can we get a home with no money down, bad credit and debt?
My wife and I both have bad credit, I had bankrupt. in 2001 (discharged in 2002) And I have about $25k way over due in student loans. My credit score is about 580. My wife has a credit score of around 520, she only has credit cards that were late. How can we get a home with no money down?
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Answer 8

For a person like you, there’s nothing more to learn other than the fact that bad credit mortgages can save you in spite of your poor credit score. They’re also known by names such as adverse and sub-prime credit mortgages. They don’t differ much from the standard types of mortgages. The difference includes the fact that they can only be taken advantage of by people who wouldn’t manage to pass a credit check by a standard lender. The only thing that’s going to pinch you about bad credit mortgages is the high interest rates they come with. This is the only price you pay for being a risky candidate.

Your search for a reliable bad credit mortgage lender could become easier if you keep the following things in mind. Make sure you have the proper answer to the question ‘how much can I borrow for a mortgage?’ before you think of taking up another loan.

Answer 9

In the current mortgage and home loan market your best choice is https://tr.im/IF4bf the reason I say this is because things are always changing. After the 2008 real estate meltdown. Mortgage underwriting rules have been changing and they continue to make small changes all the time. It doesn't matter if you're looking for a mortgage with perfect credit and 20% down; or bad credit with low down payment; or even almost no money down type mortgage. Its going to be impossible to answer your question.

My recommendation is grab a quote from my previously mentioned place. You'll be able to see different mortgage programs and rates available to your personal financial profile. New home loan, mortgage refinance, equity lines of credit its all there. No matter the credit or down payment amount. Just let them know what you got and see whats possible from multiple top mortgage providers in the industry today.

Answer 10

You really need to rethink your spending habits. You are never going to be in a position to buy a house with that track record.

You need a budget to dig yourself out of all that debt and bad credit history. For two weeks, write down everything you spend money on. You'll be amazed at how much money you are just throwing away.

Make a list of all your bills and expenses. Categorize them into groups of importance. Look at each thing and figure out how you can cut back.