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My husband and I both have bad credit but make decent money are we eligible to buy a house

  • March 29 2011 - Gray Court
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Answers (4)

Some of the answer will depend upon *why* you have bad credit. Credit scores go down when bills aren't paid so lenders will want to understand why clients have decent income but bills weren't (or aren't) paid.  Certainly life throws people curveballs - so lenders will look at bad credit after job loss, for example, differently than steady employment without paying bills.  Lenders will also 'weight' some debts differently than others.
The bottom line for a lender is "can we count on a borrower to pay us back?" and "has this borrower consistently paid back loans in the past?"
A trusted lender can give you advice specific to your situation.

  • March 29 2011
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Profile picture for wetdawgs
If you have bad credit, there are several steps in the process to get ready to purchase a home.    As we don't know your scores, we have no idea if a lender would consider you for a loan.

First, know your scores and understand what has caused low scores.  Pay everything on time, pay more than the minimum on credit cards (and don't use more than 30% of the allowed on the cards).    

At the same time, save up a substantial down payment.  For FHA, 3.5% is minimum with several percent closing costs.  With a 20% down payment, you can avoid the mortgage insurance that adds a hefty amount to the monthly payment.    Be prudent and also save up several percent for home maintenance because houses can be a black hole.

You can do this investigation yourself and don't need a professional, but if you wish to talk to a lender, take your data into your nearest lender and review with her/him.
  • March 29 2011
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I would recommend looking into using a local bank.  If you can find a local bank based in your town, they are going to be more likely to give you a little more assistance since they aren't going to sell your loan out to another company immediately after closing.  You may have to put 10% or more down to keep the loan local.

Best wishes,
Shayne
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  • March 29 2011
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I would suggest talking with your bank or credit union or a mortgage professional to see what is possible. It is really hard to say without you sharing your personal information. Good luck and best wishes!
  • March 29 2011
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