We meet people every day that have a experienced a few credit difficulties in the last couple of years, but who are interested in buying a home but are questioning Should I be a Homeowner or a Renter?. Often, their opinion of their credit situation is worse than it really is.
If you meet the below criterion, we can usually find a lender to make a loan to you. There are some great specialty financing programs in the NC/SC Greater Charlotte area for some income and credit qualified households, they offer loans for buyers with no credit, low credit and middle credit scores down to 600 FICO. Generally, every borrower on the loan must meet these same standards.
· Employment: Verification for 12+ months as W-9 employee. If self employed or employed in more than one type of work, need 24 months work history AND two years of tax returns.
· Credit Score: If home is for personal residence, 600+middle FICO. Some lenders work with alternative credit files and a few income qualified owner occupant programs are not credit dependent. 640+ FICO is preferred.
· Credit obligations: Generally all open credit accounts should be paid to 25% of total available balance. A small balance is preferred to full payoff. Closing accounts is not recommended.
· Credit Payments: 6+ months on-time payments of all monthly housing, vehicle, utility, telephone and all other bills. (12 months is preferred)
· Judgments/ Vehicle Reposessions: Must be settled and repaid or occasionally can be approved if at least two on time payments made on a payment plan. Medical collections can often remain unpaid. IRS liens must be settled and repaid.
· Bankruptcy: at least 2 years after Chapter 7 discharge or 2 years past final payment on Chapter 13 (can be after 1 year of payout elapsed IF payment performance satisfactory AND court grants permission to enter into mortgage).
· Foreclosure Short Sale or Deed in lieu: None within 3 years. Longer for many types of loans. Occasionally if no lates prior to short sale, 2 years past.
· Other conditions apply based lender specific underwriting requirements and review a background check of each borrower's credit/employment history.
The farther below these minimums Buyers are, the more work they will need to become qualified. Conventional Loans and Jumbos have different waiting periods. Borrower subject to underwriting and criterion subject to change.
You should be working with a Realtor who includes fitting financing to your personal needs and who can direct you to 100% financing, options for $100, $500 and other low down payment loans and who is successful in finding or negotating for closing cost assistance. There are some great loans that allow you to lock in a rate and shop, and loans that offer income protection in case your employment situation changes after you purchase. We also have options for credit repair for motivated people who are willing to take the steps necessary to become homeowners in the future.
If you have any questions or need additional information, please e-mail, text or call Daniel Fisher direct at 704.617.3544. We look forward to the possibility of working together in the purchase of your home - whenever it is YOUR time to make a move.