House Loans and Down Payments

Forum|Forum|7 years ago
August 16, 2018
20 replies
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How do I get approved for a house loan if I have a very low credit score and quite a bit of debt?

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SimsShavawn

Needing affordable place to live.

Srawley148

Call me and I'll get you pre qualified. I am a loan officer as well as a real estate agent. I have been in lending for 14 years and we offer a range variety of programs from stated programs to your traditional full doc conforming loans. We also have loans that require NO FICO score as well. Look forward to speaking with you. Have a great day!

Steven Rawley
[phone number removed]
NMLS#888290

Yamila

Hello I interested in your loan programs. Could you please contact me. My number is [phone number removed]. Please don't call from a block or unknown number cause I won't answer. If you perfer we could communicate via email first. My email address is [email address removed]

Thanks so much.

8201973

I have a Low credit score I'm trying to find out how to get approved for a house loan

Grade A Investor

I definitely understand! Being approved for a mortgage can be trialsome with low credit. With low credit scores, you may what to try for a FHA loan which is provided by the federal government. Though even for that loan, a minimum of 620 Is required. Keep in mind that the credit score that mortgage lenders see is often quite lower than one you may see from your regular FICO score.

Now with all of that said, yes, getting a mortgage may prove difficult. But there are other ways to step into that home that you want without a mortgage. These may call for you or your real estate agent proposing these financing ideas to the seller, if the home is not currently marketed in this format. The following are only a couple of ways that make it possible to get into a home without a mortgage and with lower credit:

1) Search for Lease Option Homes. These are homes where the seller is leasing the residence to you in the hopes of you eventually buying the property. In this case, you pay monthly rent plus a bit more; that extra cost often gets added to the down payment amount, if you chose the purchase the home. If a seller is not offering this, you can always propose the idea. Pros: you get into a home, build credit while paying monthly, get amounts put towards a down payment, and will eventually be able to purchase the home with a mortgage if you are finding the right price for you. Cons: monthly cost is a fair amount higher than a mortgage, and if you decide not to buy or to move, you don't get any money back (unless agreed otherwise). There is definitely a lit to say about this option alone so feel free to ask questions.

2) Sone seller, typically ones who are trying to sell quickly, will allow you to assume their mortgage. In this case you move in without opening a new mortgage. You just pick up the payments in their mortgage. This is usually only viable for the seller if by selling they would not make a profit and they are better off having the property off. With this option, when you begin making payments on their mortgage, you can even request that the mortgage be signed over to you since you are now assuming their payments. Most sellers who are in a tight place will be happy to do this. Pros: paying a mortgage that would be cheaper than a new mortgage. Cons: takes work to find or spot these types of sellers and it's possible that a seller may not want to hand the deed over at the start. Definitely a lot more regarding this option as well!

There are plenty more options to explore. Main point is that a mortgage is going to be difficult to obtain from a lender with certain scores but it's not the end because there are many options that don't necessarily involve a mortgage that could be viable. I definitely recommend you look into alternative, creative options that might best suit you. Worst option is that you wait a year, focus strongly on building your credit, and reevaluate your credit and ability to obtain a mortgage then.

88201973 I really hope this helps!

Dafyoni

Look into FHA loans to help you get in a home. If you are paying more for rent than you would your mortgage. You can qualify if you are in the high 500s...

Jrreal

How do i get pre approved for a home loan

CarolGraddy48

How can I gee a house with my credit low

Ellaminnowpea

This might be difficult to hear, but if you have a “very” low credit score and high debt, you are not ready to own a home. Homes cost more than the monthly payment. You will have to budget for maintenance and repairs or you will soon be living in a dump, and your high debt is evidence that you don’t have a habit of budgeting at all. So step 1 is learn to spend less than you earn, step 2 stop borrowing, step 3 pay off all existing debt, step 4 save up to at least 5% of the purchase price of the home you want to buy (but 20% is best, if you can).

If you’re currently straining under a lot of debt, and you have bad credit, these steps will seem impossible. I would suggest something I did many years ago, which is a life reset. For me, it lasted about a year and a half - your situation may vary. It’s not fun, but the point is that if you’re disciplined, it is temporary and you will be glad you did it in the end. To reset, sell everything you have except the absolute bare necessities. If you’re young and single, this is easier, but a family CAN do it. I mean, no TV, cheap prepaid phone you barely use, go to the library for internet use, never eat at restaurants or fast food, and keep your groceries simple and cheap, sell your car and buy a cheap ugly one that runs good, cancel everything like Netflix, you don’t get to go out to clubs, concerts, etc., find free things to do for fun. Don’t spend money. If you can find a cheaper place to live, do it. If your living space is something you don’t enjoy, that’s actually good (as long as it’s not unsafe, of course), because if you hate it, you’ll be more motivated to hustle to get out of it. Now, live as cheaply as possible, find ways to increase your income, work extra jobs or overtime... HUSTLE. You have ONE mission: Get out of debt. Everything else is a distraction. Then save your down payment, and don’t forget to also save for closing costs, which you can estimate using the calculator on www.smartasset.com. The good news is that by the time you do all of this, your credit score will be much better. You will think you have no life, but it’s temporary, and if you’ll endure this pain now, the future will be better. If you don’t, you will struggle under the debt cycle your whole life, and that would be worse. Learn all you can about budgeting and money management.

If you move into a barely tolerable, cheap living arrangement, you might consider shortening the amount of time you have to spend there by considering a temporary home purchase (less home than what you ultimately want, but better than a depressing rental or living with your parents). You can usually buy a condo or townhome for far less than a house, so the down payment is less. So live in a barely tolerable arrangement until you can save enough for a cheap condo, but make sure it is one that will hold its value and hopefully increase while you live there. Now you’ve improved your living conditions while you continue to live cheaply and keep on pursuing your ultimate goal. Do resist the urge to furnish and decorate the condo. It’s still just a stop on the way. Just take care of it so you can sell it or rent it out when you’re done.

Good luck! I know you can do this! Anything is possible if you’re willing to try hard enough.

Cait11

I say you dont need the house yet. First get a 1,000 dollars as an Emergency fund then tackle your debts. Once that's done save up for a down payment on a house that you can afford.

BAC130

You don’t...

SKRoberts1934

How do I get approved for a house loan with very low credit score and high debt to income ratio.