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What if you have bad credit but never bought a home before. Could you still qualify for 1st time buy

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September 01 2010 - Cheswolde
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Good news:  you can!  There are many options today for alternative financing - even with less than perfect credit, so don't get discouraged if your bank says no.  Get a real estate professional to help you navigate through the process, and you'll be amazed at the many options that are out there for you.  Good luck, and congratulations on searching for your first home.
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September 01 2010
Can you please define bad credit?

One 30 day late is certainly viewed differently than a 1 year old foreclosure or bankruptcy or car repo. But to buy a house these days with bad credit? - Unless your putting a hefty amount down and are willing to pay private lender interest rate money and points, your best bet is to find a high quality mortgage banker and begin to get your credit in line so you can qualify for a mortgage.

Dottie is talking about Fannie Mae's HomePath financing... I have closed a bunch of these deals.. no appraisal is needed.. these deals have been very simple to close surprisingly. They claim "you may qualify even if your credit is less than perfect" but lender overlays will kill that thought...   for more info on HomePath financing click here
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October 07 2010
a few folks here have missed the item that for FHA loans you can buy with a lower FICO credit score than 620 and 640 but only if you have 10% down payment. If your credit scrore is 620+ then you may be able to qualify with the minimum 3.5% down payment option. Some credit unions are also running special programs for 1st time buyers so you should explore as many options as possible.

For anyone living in rural areas, it's worth looking into the USDA rural housing loan option which is one of the few 0% down programs available.

If any readers here on Zillow live in the Seattle or Bellevue areas of King County, you might consider attending this upcoming class to learn more about buying in today's market, including financing options available. [link removed by moderator]
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October 02 2010
The good news is that there are tons of programs available to first time homebuyers on the local, state, and national levels.  Definitely worth your time to investigate these programs.  The other half of the coin is that no one is doing subprime lending any more.  You need to have at least a 630/640 credit score to be approved for a mortgage loan.  My suggestion is that you contact a mortgage lender with a solid reputation in your area and allow them the opportunity to help you navigate down the road to home ownership.  Even if you don't have the credit you need to qualify today, they can help you work towards that goal.  Good luck!
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October 02 2010

There are a number of prograns that can help you with closing costs. If you are buying a Fannie Mae foreclosure, they will give you 3.5 % towards closing, no MIP and no appraisal. You really need to sit down with a reputable loan officer and discuss your situation. Go for a fixed rate mortgage so you know you will be able to afford the property in the future and do not be house poor. Just because they say you can afford $200,000 doesn't mean you should spend that much. I can give you names of loan offices I have worked with for years. They can assist you in cleaning up your credit if needed.

Good Luck,
Dottie Cordwell, Broker
Advance Realty Professionals, Inc
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October 01 2010
The question should be can you qualify for the loan to take advantage of the first time buyers programs available in the different areas?.  Today you need a minimum score of 640; sometimes more depending on the type of loan.  You credit history is an inidication of how likely you are to repay your loan in full and in time. The question is, why is your credit bad?  What do you mean by bad?  Debt to income ratio? Spend less and pay off your debts. Keep credit cards at about 50% or less dont stop using one and charging another 100%. not sure why but this gives you extra points.  Don't close any credit cards or lines of credit this decreases your debt to credit ratio.  Review your credit report carefully and pay collections, write letters of explanation , etc.. Don'st ask for credit from any one as denials take points off and don't get into any more debts.  It is crucial that you look into your situation and talk to a loan officer.  There are many things that you can do to improve your credit rating and your situation.  I worked with clients that didn't have a rating period and brought them to have a decent rating to buy in 4-6 months . This all depends in what situation have brought your credit down some can be improved in a few months others take longer; You can aslo try to get a cosigner that has a better situation to help you qualify. The cosigner needs to understand his resposibilities clearly.  I work closely with several loan oficers that can tell you exactly what is wrong and what steps to take. So a loan officer is the way to go. .  Definetely talk to a good loan officer. I can recommend one. 
 
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September 01 2010
The government's first time homebuyer tax credit has expired. BUT there are first time homebuyer programs in Baltimore City that you could possibly qualify for, if you meet certain criteria.
If you would like to learn more, please let me know. I would be happy to help!
Sincerely,
Marney Kirk
Keller Williams Excellence Realty
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September 01 2010
Yes you can!?  That's a tough answer from someone that has yet to:

a) See you as an applicant and
b) Appraise the property that you want to buy.

My advice is to shop yourself around and discuss your financial situation with a few mortgage brokers.   Bring a friend with you that has bought before and is smart.   Be weary of certain loans and make sure that you can afford the monthly payment.   If the loan "adjusts" in 3 or 5 years, ask in plain terms how much that new payment will be.

Good luck!!!

Cheers,
Bill P
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September 01 2010
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The federal first time home buyer's tax credit required having a contract by April 30 and closing by end of Sept 2010. (Therefore, for the federal credit you are too late).   If active military, certain types can extend the deadlines by a year to 2011.   

However, in all cases, one must have the ability to pay for a house to qualify.   If you don't have cash, and don't have the credit to qualify for a mortgage, then it isn't time to buy.
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September 01 2010
 
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What if you have bad credit but never bought a home before. Could you still qualify for 1st time buy
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