Profile picture for jtabay

How to buy a house if you cant get the mortgage

I have question, with tightening credit standards and the lack of funds available right are there other ways to approach home buying

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October 14 2008 - US
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Profile picture for Lady Chattel

uh, this is really a far out there idea, one not very popular with the give it to me now generation......save your money until you can buy/afford a home.  

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October 14 2008
Profile picture for jtabay

i can afford the home, its just i ran to some problems in the past w/ credit and i am working on rebuilding it but i was wondering if there any options out there beside the traditional method

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October 14 2008
Profile picture for Lady Chattel

The non traditional method got us in this financial crisis going on right now.....besides, depending on where you live there will be plenty of time to catch a bargain and save money as theprices fall.

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October 14 2008
Profile picture for jtabay

thank you letting me know that about issues we have right now but you are providing me with nothing so if there is someone who can discuss what are some nontraditional methods of buying i would appreciate it

 

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October 14 2008

If it is still impacting your ability to get a loan, it isn't far enough back and you still are probably likely to repeat those behaviors when times are tight.

 

However, you can consider borrowing from family. I don't recommend it, but every family is different. Try posting in the mortgage forum.

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October 14 2008
Profile picture for bakammer

FHA has low down payment requirements and will write loans to people with lower credit scores.

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October 14 2008
Profile picture for jtabay

thank you

there was a gentlemen i worked with last year that talked about, i believe a purchase agreement, where you will agree to purchase at a specific date but utilities and such will be in your name

 

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October 14 2008
Profile picture for urge
  • urge
  • Contributions:207
Put a gun onto seller"s head and make him an offer he cannot refuse. Or, just accept the fact that you don't have money to buy a house.
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October 14 2008
Profile picture for Future28
FHA is most likely your best bet for low funds and low credit score. But even the FHA will monitor your income to debt ratio and based on that information, an approval will be decided. Another option I have seen is "Owner Financing", where sellers are willing to finance your mortgage with specialized agreements. This untraditional method will most definitely limit your home search for I have only see a few and most of the time you won't get a good interest rate - but then again everything is negotiable.
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October 14 2008
Profile picture for Bette Defarm
"i believe a purchase agreement, where you will agree to purchase at a specific date but utilities and such will be in your name"

"Rent to own" is almost always a bad deal. It sounds as though delaying gratification is a foreign concept to you, but the days of people buying with crappy credit are over.
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October 14 2008
Profile picture for Bette Defarm
*Thank G-d!*
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October 14 2008
Profile picture for 4jacks

jta, you say you can afford a house, but have credit problems.  Do you have a decent down payment saved up?  If you can afford a house, but do not have a down payment, the first thing you need to do is put all the money that would be going towards your house into savings, to act as a down payment.

 

with a decent downpayment you can get a loan.

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October 14 2008

How far back are your credit problems? My husband's credit went from the 5's to the high 6's in under a year when we first started dating/getting his act together. High 6's can get you a loan with a decent down payment.

 

Remember, affording the payments isn't affording the house. You will need a down payment, have other bills, unexpected expenses, etc.

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October 14 2008
Profile picture for BMFPitt

Don't.  That is all.

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October 14 2008

I agree. Take the time to clean up your credit and then enjoy the buying power you will have.  I also recommend against the rent to own idea,  I have only done a couple, but it has not worked out well.  It is going to be a while before things are back to normal, so you have time to get your credit better and still find a great deal on a home.

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October 14 2008
Profile picture for Pasadenan

People have been buying homes without mortgages for decades.  It is very common in San Marreno.  People pool their resources, buy together, and loan friends and relatives cash.

 

But if you can save money while improving the credit score and while prices are dropping, why would you want to buy now?  Pay the mortgage payment to your investment account as if you had the mortgage, pay bills the same week they arrive in the mailbox, and don't buy things you don't plan to use (or that are overpriced...) and you will have no problem getting a mortgage by the time you need to buy.  3 to 4 years of excellent payment history should easily get you a credit score over 800.

 

Don't just pay minimum on your credit cards; pay them off to avoid charges.  Those charges substantually exceed any interest your saved money would make.

 

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October 14 2008

Some sellers are willing to carry a contract, basically allowing you to make payments to the seller instead of a lender. It is always a good idea to have a real estate attorney draw up the contract with these types of purchases. However, a smart seller knows they are taking a HUGE risk by accepting this kind of contract and may ask to see a credit report. They may or may not accept a contract based on your credit. Seller carrying a contract will typically ask for a higher interest rate as well.

 

Your best bet is to improve your credit situation and go with a more conventional route. A good mortgage broker can show you ways to improve your credit in a relative short period of time. Many of them have access to low cost credit correction companies comprised of attorneys. In the past, many of these credit correction companies were bad deals, but these days there are some legitimate ones that can really help. 

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October 14 2008

Jt, with a credit score as low as 600 and 3% soon to be 3.5% down FHA is a way for you to consider, if you can meet those minimum requirements. Good luck!

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October 14 2008

If you have been advised by a reputable lender that you are not qualified to buy a home, then don't bend yourself into a pretzel trying.  Get your credit in order, save money and then when you are ready, determine what you can afford to buy and go after it.

 

Good luck.

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October 14 2008

The save & wait responders are giving you great advice.

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October 15 2008
Profile picture for Lady Chattel

Yeah, but jtabay got pissy with me when the message wasn't "here is how to do something you really shouldn't do but because you really want to here is the way".   Duh.  

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October 15 2008
Profile picture for Mr Caveat

if you cannot get a loan and you cant put down the down payment, what makes you think "i can afford the house" ? is that not a little like a little kid saying "but dad i can take care of the puppy" and the father pointing out that the 14 hampsters and goldfish hes bought, disagree

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October 15 2008
Profile picture for Mr Caveat

just a note, you can get any credit score over 600 within 3-6 months if you arent continually running into "problems" with your credit score

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October 15 2008
Profile picture for Lady Chattel

NTETS so true.  

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October 15 2008
Profile picture for Michinaga

The only thing I can think of is that JTabay has some kind of unusual or irregular income (commission-only salesman?) or is an immigrant working (with a steady, well-paying job that unfortunately can't be revealed to the government) outside the confines of his visa.

 

Otherwise you should be able to get a loan if you have the required down payment.  Just wait 6 months (RE has some more to drop anyway), don't spend any money you don't have, and then offer to buy with a big down payment.  You'll be fine.

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October 15 2008

jtabay, try saving your money, paying your bills on time, and spending less than your income. Talk to a realtor and a local mortgage lender. Show them your numbers and ask for their help in making a plan to improve your appeal to mortgage lenders. This will take discipline on your part but be well worth the time and effort.

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October 15 2008
Profile picture for low rents of arabia

So you have a history of not paying your bills, and haven't saved a down payment, and you are wondering how you can own a home?

 

Get a time machine, travel back to years 2002 to 2005, and speak to a mortgage broker.

 

Other than that, you are out of luck.

 

We all want lots of things.

 

I want a private 747 with the Hooters girls as stewardesses, but guess what.  I can't have it.  Wahh wahh wahh.

 

 

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October 15 2008
Profile picture for low rents of arabia

There is a type of non-traditional arrangement where you make periodic payments to the owner of the house (monthly, typically) and you get the exclusive right to occupy the house.  The utilities, etc, can even be in your name if you wish.  You will have the keys and nearly all the rights that an owner would have.  It works quite well for those without the credit or downpayment to own, but who would still like to occupy a dwelling for shelter.   Even those that could easily own the "traditional" way often choose this arrangment since there is less hassle, more flexibility, and much less risk than traditional ownership.

 

Please let me know if you would like more info.  About 35% of the US population uses this arrangement rather than traditional owership of their residence.

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October 15 2008

If you can afford a home right now you can afford a ......

 

BIG DOWN PAYMENT

Before I had stellar credit I was house shopping and that’s what was needed. If you can come in with a big down payment that banks will work with because you are less likely to walk away from your own money. That is why we are in the mess we are in now...100% financing doesn’t give people much of a reason to stay in a heavily depreciating property.

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October 15 2008
Profile picture for Lady Chattel

LMAO Renter123, I loved your description.   

 

 

 

 

 

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October 15 2008
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