Home Buying in 01453>Question Details

Scottishmist, Renter in 01453

Chances of obtaining a mortgage

Asked by Scottishmist, 01453 Mon Jun 14, 2010

off the cuff.. I am tired of paying rent in my present location and would rather put my money to a home or townhouse, however ( isn't there always a catch) my credit is not the best, and no money down. What are my chances of obtaining a mortgage? Would I be better off to check into foreclosed properties? Saw a fixer upper w/ rehab financing- what is that?

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Hi Scottishmist,

With your credit not the best and no down payment, I would probably save up and work on getting your credit a little better since as many mentioned, most loans do require some sort of a down payment, whether it be an FHA loan or rehab loan, and even if you were to get into a loan program that helps with the down payment assistance, there are upfront costs you'll need to have money for, such as with an initial offer, paying for a home inspection (around $400 or so), then getting an appraiser from the bank if the inspection goes well (again could be $300-400), then putting some form of a small deposit with a Purchase and Sales Agreement, etc. So many people have a misconception of being able to buy a home with no money down, when in essence, it's better to have some money saved to be spent on all these other costs involved with the purchase. So please keep that in mind as well. :o)

Talking with a mortgage broker is a good first step, and I work with a few that even have credit repair programs that can analyze your credit situation and give you tips to get your credit score better to make you successful in the future when buying something. It's better to buy something when you have the financial stabillity rather than living just to pay your mortgage to get out of your current situation.

I wish you well on your decision and feel free to contact me with any other questions or the names of those mortgage brokers. Take care!

Angela Dolber
Prudential Prime Properties
508-826-8553
angela@pruprimehomes.com
0 votes Thank Flag Link Tue Jun 15, 2010
Rehab financing requires money down and good credit scores. Lenders generally look for scores over 620. In regards to no money down, it can be done with a good credit score. My suggestion would be to work on paying off whatever is affecting your score and making sure nothing is on the credit report that is older than 7 years. My second suggestion would be to try saving $20 a week towards a down payment. Immediately divert the money into a savings account. That is $1040, before interest, saved in one year. On top of the down payment, there are other up front costs you will need to pay to get into a home. These include home inspections and bank appraisals. You may want to speak to a mortgage counselor to see what strategy would work best for you. I have several names if you are interested.
0 votes Thank Flag Link Fri Nov 22, 2013
Talk to a mortgage broker. There are many programs out there for the first time home buyer. Unfortunately credit score is a little bit of a priority. If you are working with the right broker they can help you raise your score in a short period of time..... 6 months to a year.

Do your self a favor and contact a mortgage broker, instead of wondering and second guessing you can cut right to the chase.
Web Reference: http://www.thehousewiz.com
0 votes Thank Flag Link Tue Jun 15, 2010
I agree with both comments below. The only added advise I would give you is that there are local programs available that offer down payment assistance to some first time buyers. I would also suggest you meet with a qualified real estate agent and who can provide you with an overview of the pros and cons of home ownership. The Leominster area has a lot to offer so it would make sense for you to do your homework first. Let me know if I can be of any further help.
Regards,
K. L. Santos
Web Reference: http://www.kevinlsantos.com
0 votes Thank Flag Link Mon Jun 14, 2010
I agree that it doesn't hurt to ask a mortgage broker. Since you are a first time home buyer, there are programs where you can put as little as 3.5% down through FHA. The house has to be in decent condition though -- no safety issues. You can also build some or all of your closing costs into the mortgage which helps with the upfront money required.

Foreclosures and fixer uppers would likely require a rehab loan. These take longer to get since you have to get all the estimates up front before you can close. They are also a bit higher in terms of interest rates. Again, a mortgage broker could tell you whether or not you qualify.

You may want to consider getting a condo/townhouse since these are at lower prices. However, many of the complexes (with the lowest priced units) typically will not qualify for FHA loans. This is due to the number of renters in the complex, percentage of deliquent condo fees and sometimes even the number of FHA mortgages already in the complex.

I would definitely recommend speaking with the mortgage broker to find out where you stand. Then start looking at properties and save some money so you can put more down if you need to.

Good luck!
Web Reference: http://www.sherriway.com
0 votes Thank Flag Link Mon Jun 14, 2010
Hello,
These days it all comes down to score. Althrough the score requirements are t ypically 620 for most programs. No, with that said, there are some excellent renovation programs out there where you can finance a foreclosed home (REO) and finance the renovations right into the loan. This is a great first time home buyer product because it is available with very little down, and no MI. The first step would be to run your credit and get a plan of action together.

Give me a shout if you need some help!
Good luck!
0 votes Thank Flag Link Mon Jun 14, 2010
Even with a rehab loan, called a 203K, you need 3.5% down for the purchase. Talk to a local lender!!
Heidi
Web Reference: http://www.mdmrealtyinc.com
0 votes Thank Flag Link Mon Jun 14, 2010
Hello,
These days it all comes down to score. Althrough the score requirements are t ypically 620 for most programs. No, with that said, there are some excellent renovation programs out there where you can finance a foreclosed home (REO) and finance the renovations right into the loan. This is a great first time home buyer product because it is available with very little down, and no MI. The first step would be to run your credit and get a plan of action together.

Give me a shout if you need some help!
Good luck!
0 votes Thank Flag Link Mon Jun 14, 2010
You really need to talk to a local lender to see if you can qualify for a mortgage loan and if not what you need to do to improve your credit situation. It can be as simple as a phone call, to obtain a general idea about the state of your credit. Regarding rehab financing for a foreclosure, you still need to qualify for a mortgage loan.
0 votes Thank Flag Link Mon Jun 14, 2010
Scottishmist, thank you for your question about obtaining a mortgage with a fair credit score and no money down.

There is an old saying that says, "you'll never know until you try."

I suggest going to a mortgage banker or talking with the mortgage department at your local bank because there are special programs and other incentives out there that can help you get into a home if you do not qualify under the traditional criteria.
0 votes Thank Flag Link Mon Jun 14, 2010
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