Profile picture for olephillygirl2005

I don't have a down payment or good credit. Can I still buy a home?

  • October 13 2013 - Newark
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Answers (14)

I can't count the number of times that potential customers have said "I don't have good credit" only to have them talk to a lender and find that their credit isn't as bad as they thought.
First talk to a mortgage professional, have them run your credit and see.  The free credit reports you see on line are different that what a potential lender would see.
As for down payments, there are a few options that might be worth looking into.  The USDA has a zero down program that is called the Rural Development Loan.  It's a great program but is location based. Check the area you live in on the USDA website (when the government is up and running again) to see the locations in your area that are approved.  Also, depending upon your income level, some banks offer 0 down loans as well  (these are through the My Community Program of Fannie Mae).  Gifts from family members can be used for down payments for FHA purchases.
Until you have a conversation with a mortgage professional, I wouldn't give up hope.  Also, a good mortgage professional will direct you to a company that can guide you through the necessary steps to improve your credit sufficiently to get the loan approval you want.
Good luck.
  • October 14 2013
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Only way is through a VA loan for Veterans with the no down payment--if you're in that category as former military in good standing then you're in business otherwise you're not quite ready yet based on your current status.
Therefore, keep renting on time and pay down your debts as that will raise your credit scores. And save your money for the down payment then come back to us.
  • October 14 2013
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Because income and credit are the two main requirements for home ownership, you can not simply ignore them. However, there are some other avenues...Regarding credit: you can look to credit repair companies that can help improve your credit. For down payment: you can request gift funds from your family/friends that might be willing/able to help accomplish your dreams of home ownership.  
  • October 14 2013
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Hi Olephillygirl,

Just because you do not have good credit or sufficient down payment, there are things you can do to prepare for buying a home in the near future. The first thing you can do to help your credit scores, is to negotiate your debts with your creditors, who will often time let you pay off the existing debt for half of what was originally owed. This alone will have a substantial impact on your credit scores once these accounts are resolved with the creditors. Once you have done this, it is possible to buy a Fannie Mae Homepath property with as little as 3% down and Fannie Mae will usually be willing to help with at least 3-4% of the contract sales price towards your closing costs.

I hope you found this information helpful and best of luck!

Scott Mees
  • October 14 2013
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It does not sound like you are prepared for home ownership yet.
  • October 14 2013
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Unfortunately, those are two very important things for getting a loan but it still may be possible. What is your exact credit score because it still may work? For example, I have been able to give out loans with scores as low as 580. So if you are in that range or above, you might have a shot. Otherwise, I recommend you work on your credit for a bit. The simplest way to fix your credit score is to pay off your debt and revolving credit balance. Also, FHA loans are popular mortgages that only require 3.5% down. This is a relatively low down payment that you can hopefully save up to after some time.

Either way, I suggest you speak with a lender like myself. We would be glad to speak with you to help you get the loan that you need. So if you have any other questions or need a loan, please contact me through the information on my profile page. I hope this helps and good luck!
  • October 14 2013
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More than likely it is not possible at this time.  Work on your credit and get it repaired.  Save money for a down payment.  In a couple of years you might be in better shape.
  • October 14 2013
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[self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines] Good Luck!!
  • October 13 2013
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Profile picture for Ofe Polack
If you do not have money for a down payment and bad credit, why would you want to add another burden to your plate?  I suggest that you get together with at least two mortgage brokers to find out what would it take to improve your credit and save for the down payment.  If you are a VA you pay no down payment, otherwise unless you qualify for Rural Development, you will need closing money and a down payment.  Good luckl
  • October 13 2013
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Profile picture for wetdawgs
Yes, you can buy a home but it will take a few steps to get there.  The two critical ones are repairing your credit and saving the down payment, closing costs and an emergency fund.  That means you can't buy today, but I hope you already realized that.

The Zillow buyer's roadmap provides excellent step by step approach to getting ready.

The best way to get in big financial trouble is to try to buy before you are ready.   Many professionals will give you assistance in getting there.
  • October 13 2013
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Profile picture for j3350489
You can go with a usda loan with no money down or a va loan however you will still need some money for some closing cost . I would start working on your credit and save some money . Talk to a few banks and find one that works best for you and set up a plan with them or even look for a good credit counselor and they can help
  • October 13 2013
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Profile picture for Daniel Mirea
hi There,

  You should talk to the best loan officer in the area! If you don't know one try to call some real estates agents on Zillow in Newark and asked them for a good loan officer! Make a list and try to see what options you have! I am sure you can buy a home! You can do it!

Good Luck!
  • October 13 2013
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Hello, olephillygirl2005,

Regarding the down payment issue, if you have no money then it will probably be very difficult to get a loan.  Most loans require a down payment - FHA will require 3 1/2%, conventional will require a minimum of 5%.  In the state of Virginia, we have some loans for first time homebuyers that will let you get in for no down payment, but there are some requirements on credit, etc.  Even if you can get something like grant money they will still require some sort of reserve in your account.  But much of that will depend upon what state you will be in when you purchase.

Regarding your credit score, what loans you may qualify for will have minimum credit score requirements.  So the answer to your question may be that it is going to depend upon what loan you are trying to get and what your actual credit report looks like.

I would suggest that you talk to a reputable lender in your area to have them pull your credit report.  They can look at what your actual credit score is and what you would need to do to clean up your credit and bring your score up.  They will also be able to let you know just how much cash you will need to be able to purchase a home.  It may take only a few months to accomplish what you need to do, or it may take much longer.  But knowing this and what you will need to do to get your credit and finances into a position to purchase a home is the first step.

I hope that this helps.  Good luck with your future home purchase.

Barbara A. Reagan
Long & Foster Realtors
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  • October 13 2013
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Profile picture for Outer Banks N C
You will find it difficult.
  • October 13 2013
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