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January 11, 2012

5 Steps for Getting Approved fоr а Fіrst Time Ноmе Loan

Category: First Time Home Buyer,Home Financing Tips – admin – 12:35 am

Most consumers understand that bad credit home buying will have its set of challenges. First time home buyers need to learn to multi-task so they can get approved for financing and home buying in a timely manner.

1.  Start wіth cleaning uр уоur financial life аs best уоu саn whеn pursuing hоw tо gеt а fіrst time loan to buy a hоmе wіth bad credit. Υоur раst actions will nеvеr bе forgotten іf уоu continue thеm іntо thе future.

2.  Paying аll уоur bills оn time аnd saving uр fоr а dоwn payment іs аn excellent wау tо prepare tо apply fоr а hоmе loan fоr fіrst time homebuyers wіth less than perfect credit.

3.  Get organized beforehand, because bad credit mortgages оftеn hаvе mоrе extensive application requirements thаn thоsе thаt аrе offered tо people wіth sterling credit ratings. It doesn’t hurt to meet wіth а free debt оr financial counselor саn help shоw lenders thаt уоu аrе serious аbоut turning уоur finances аrоund.

4.  Allign yourself with an experienced Realtor that specializes in your local market. In many cases, a good realtor will open the door uncovering bargains that can save you money.

5.  Get Pre-Approved and find a loan officer and mortgage lender that you trust to work with.

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July 6, 2011

5 Steps for Buying a Home with Bad Credit

Category: Home Financing Tips,Subprime Home Loans – admin – 12:10 pm

If you want to buy a home with bad credit, there are several important factors that will help you financing endeavors.  The first step is to obtain a copy of your credit report to see what accounts are reporting late and whether or not there are any errors being reported on your credit cards or loan payments.  It’s a good idea to know your scores and any obstacles before applying for a bad credit mortgage.  If there are issues we suggest addressing them before submitting your home loan application to a lending professional. 

If you have a credit score below 620, you may need to come up with a bigger down-payment.  In most cases first time home buyers who have credit scores above 580 will only have to come up with a 3.5% down-payment on FHA loans as long as the borrowers have a good job and income that can be documented.  FHA still offers home loans to borrowers with a minimum credit score of 500, but if you fall below 580, the underwriter may request a more substantial down-payment. 

Finding a bad credit lender can be cumbersome as many loan companies have eliminated their subprime loan programs for purchasing and mortgage refinancing.  There are still a few lending options for bad credit home loans, but mostly from government programs like VA and FHA.  The other popular conventional loans conform to the Fannie Mae and Freddie Mac criteria and they have tightened their guidelines significantly over the last few years.  When shopping bad credit mortgage lenders, make sure the loan representative understand your goals and credit credentials.  You want them to understand your credit and abilities for down-payments.  If the lenders do not offer VA or FHA home loans and you have credit scores below 620, chances are this lender will not be able to help meet your home financing needs. Once you find some lenders that meet your goals, make sure you compare “Good Faith Estimates” so you can evaluate the home loan rates and closing costs. 

Buying a Home with Bad Credit

  1. Get a Free Copy of Your Credit Report (make sure the report shows your scores from all 3 bureaus)
  2. Verify Your Debt to Income Ratio and Credit Scores meet the lenders criteria for home purchase loans
  3. Compare Loan Quotes from FHA Lenders (make sure that your lender is FHA Approved to offer financing in your region)
  4. Obtain the Loan Disclosures from each Lender that is Quoting You Rates and Loan Offers
  5. Get a Pre-Approval in Writing from each Mortgage Lender

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