Financing in Columbus>Question Details

Julie, Renter in Columbus, OH

How hard is it to get preapproved for a home loan with bad credit?

Asked by Julie, Columbus, OH Thu Jul 19, 2012

My husband and I have bad credit(580/605) and have always rented, but we recently came upon an empty house we just fell in love with. It is going to the sheriff's auction in a few months. Do we have a chance at getting preapproved for a loan for it???

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Your chances are slim to none on getting a mortgage. If you have not paid your bills on time, why would a lender take a chance on you. Go to your local non profit housing group for credit counseling. They will tell you what you have done wrong and what you should be doing. Listen to them and when your FICO is at least 640, you can go to a lender for pre-approval.
1 vote Thank Flag Link Thu Jul 19, 2012
Dear Julie, this is a time to act on your desire to own a home, and not act on trying to get this particular house. Your credit is low, but can probably be easily increased with the help of professionals to help you get on track. An auction is something for experienced homebuyers to deal with. You need to start with the basics, finding a lender and a realtor. I would suggest you contact some of the realtors on Trulia from your area, or go to local open houses and get to know some agents and see who you feel comfortable working with. They can also recommend some lenders in the area that can give you the best advice for finding a home that you can afford. Best, Terry
0 votes Thank Flag Link Thu Jul 19, 2012
Hi Julie,

Thank you for your question and reaching out on this platform for an answer. I have to echo the other answers, this is a question for a loan originator. My main concern here is the home your interested in buying, which is going to sheriffs sale. You need to get an realtor on board as soon as possible.
A Realtor will help you to determine the current market value of the home. This is important because at the sheriffs sale who ever has a loan on the property will bid on what is OWED on the home plus their cost, NOT on what the property is worth. Why is this important to know, because the home may be currently worth lets say $150,000, but $185,000 might be owed on it which is were the owner of the note will bid at to protect their interest in the property which they have a fiduciary duty to do so.
Get a Realtor to assist you in determining it's market value and then work with him/her through the process. You may be better off letting the bank take back the property at sale and then wait for the bank to put it on the market at market prices.

All the best to you in this venture!
Jeffrey Paeltz
614.288.0423
0 votes Thank Flag Link Thu Jul 19, 2012
Julie

Depending on what type of credit issues and snags you are dealing with you may be surprised on what you hear once you speak with a lender. It is a good idea to start somewhere to get you both headed in the right direction. I can connect you with a few great lenders and loan officers that can guide you in the right direction whether it's buying sometime this year , or based on what they find , possibly being a few years out. Have you considered lease purchases in the meantime ? This is a good option and potentially will build some accumulated rent into the purchase
Email if you have more questions or would like to get going on seeing what you can do!
L.Swieterman@gmail.com
614-352-0723 direct
Hope to hear from you!:)
0 votes Thank Flag Link Thu Jul 19, 2012
Reach out to a mortgage professional who can help you determine if now is the right time for you to get approved for a mortgage. There are programs available to help with credit repair. You may be surprised that a few simple steps will put you in the right direction to move forward and increase your credit score.
0 votes Thank Flag Link Thu Jul 19, 2012
talk to your Mortgage professional to help you get started in a credit repair program. Most lenders will put you back on track for home ownership in no time with a few easy steps to repair credit history.
0 votes Thank Flag Link Thu Jul 19, 2012
You should meet with a lender as soon as possible to see if you can qualify.
0 votes Thank Flag Link Thu Jul 19, 2012
It is always best to talk to your bank or a mortgage broker to see what you are pre-approved or pre-qualified for. You can also go on the sheriff sales county website to get more details on the process.
0 votes Thank Flag Link Thu Jul 19, 2012
Once the bank buys it back at the auction it can take many months before the bank puts it up for sale with Realtor so you have time to find out if you can get a loan. Speak to a lender and let them advise you. You won't be able to buy it at the auction, they require cash so usually the bank buys it back.
0 votes Thank Flag Link Thu Jul 19, 2012
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