Owning your own home is a big step in any persons life. There are quite allot of people out there telling themselves that they can never own a home, this is simply not true. You can own a home even if you have bad credit. You are about to find out the answers to all your questions right here on this one page.
Most lenders at this point are doing what they can to help get buyers in a home. This is because families and individuals now days do not have perfect credit or even good credit. There is hope for you to have the home you have always wanted and you will not have to rent forever.
Here is just a few things you will need to know:
FHA Loans are not based on your credit score but more on your faithfulness to pay your payments on time and to keep your word.
You can not have anything on your credit report that is in collections. And it is a good idea to double check your past finances and make sure that nothing will be reported to your credit report in the future that will be negative and/or be placed in collections that would result in your credit report showing a collection account. You will need to obtain a payment history with a landlord. Rental history is a must have for anyone who seeks to buy a home. A good place to start is right now. You will need to have at least 12 months of on time payments to your landlord that is documented by a statement or receipt. Open a checking account and be sure to pay your rent payments with a check for your records as well, and this will also show your responsible by having a checking account in good standings. Always a plus! FHA Loans are not usually based on a credit score, you may need to ask the lender for the specifics of the FHA loans they provide. Sometimes you may need a credit score of more than 0 or un rated. You will also need trade leads to obtain any loan from a lender. Here are a few examples of trade leads: 2 secured or non-secured credit cards keeping the balance due under 30% of the limit. Paying each monthly payment in a timely manner and not being late with in that 12 month period. Car payments for previous 12 months consecutive with no late payment with in past 12 months Insurance policy/payments for 12 months consecutive, either renter's or auto policy with no lack of coverage, and no late payments for past 12 months Residential Phone line, or cell phone bill, Contract and payment history for 12 months consecutive and must show current payments and no late payments within past 12 month UTILITIES: Water, Gas, Sewer, Lights, Cable any or all of those listed with 12 months consecutive payments with no late payments in the past 12 months. Obtain a letter of reference from employer, this could be a letter from employer or department supervisor on company letter head, stating the reference of your character based on years on job and what they personally see, this will work as a good supporting factor to help them to ensure that you strive to move up in the company and intend to be there long term, this letter helps prove job stability as well. It is very important to keep up on all your payments to anyone whom you have an account with. Lenders must decide whether you are a good risk or a bad risk. You want to be a good risk for them to take. If you fail to make your payments lenders will feel as if you may treat them the same way, this will lead to lenders saying no. You do not want this to happen to you. Do not let your credit get out of hand. Do not get a lot of credit cards, a good rule of thumb is to have at the minimum 2 credit cards, and the best rule of thumb to get you the most points in your credit reports is to be sure that each account you hold you keep the balance due under 30% of your credit limit. You will achieve the most points on your credit report with this method. You can raise your credit score as little as 5 points and as much as 60 points in one given month.
It is not a good idea to get a lot of credit to bring your score up, you can do this by only having 2 credit cards or a loan that you can pay off quickly. If you currently have a loan, the best option for most is to pay it off. Be sure to ask the lender of each loan if they report to all 3 credit bureaus. Most rent to own places do not report to any of the credit bureaus, you can ask but I am sure that they do not.
For most other lenders and loans outside of FHA you may or may not be able to have a bankruptcy, if you do it may need to be at least 2 years old from the date filed or the date discharged, you may want to ask the lender you choose. Also if you have had a foreclosure before you may or may not have to wait until it is at least 3 years old from the date the bank reported it or from the date of your notification of foreclosure. You are still able to get funding from a lender with a bankruptcy and/or foreclosure. You will still need to double check with your lender of choice.
Outside of an FHA Loan there are other loan programs out there that you can qualify for, some have certain limits and specifics to them and you will need to see which one fits you best. Some may ask for a credit score of 600, or 620 or even 640. If you have a credit score of 700 or more you are in the best position of all, and you should be able to get the perfect loan to fit you best.
By the time that you are able to qualify for a home you are on your way to home ownership. The key element is to not apply for credit, allow anyone to run your credit during the home buying process, other than the lender you are dealing with. Each time your credit is ran by anyone who pulls a report your credit score drops and this can hurt your chances of funding and your funding options. Be sure not คอนโดมือสอง กรุงเทพ to over do it. Your lender can tell you the exact things to do and not to do and you want to listen to what they have to say.
Once you are approved for a loan, be sure to develop a budget that you want to stay under. Most lenders will tell you that you qualify for a $200,000 home but you may not be able to afford the payment. You want to get approved based on the payment you can afford. Your payment should also include property taxes, homeowner's insurance, mortgage insurance, homeowners association dues, andy anything else that you may be required to pay. Once you are ready to close and get your keys, you will need to contact your lender or title company and ask for the exact amount of money that is due at closing, you may want to ask 30 days in advance, so there are no surprises. You will need to fund an escrow account with at least 3 months of funds upfront at closing. You will also need to obtain in advance 1 years policy of homeowners insurance. You do not want any surprises at closing that will keep you from getting in that home of your dreams.
Seek the advice of a lender prior to buying a home, most lenders follow the same guidelines but some of them may vary. But there is hope and you can buy a home.
I wanted to share some of the things that I personally have learned when buying a home. I have purchased 2 homes, both experiences were different but the same objective is there whether or not you are a good risk to take or a bad risk. You want to be a good risk.
Now you can be on your way to home ownership, Good luck!
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