If a short sale or foreclosure was not involved, you will need to get your score above 580 (middle score of three credit reporting agencies. If you have credit card debt, make sure that no card is over 50% of the card limit (below 30% on any card can make a big difference)-- rearrange/balance the card debt to get below the 30% mark if you have a card with lower levels . No late payments for the last 12 months.
You may find a seller willing to carry a loan on the house, but it can be difficult to find the right house and a fair deal. Generally seller financing requires a large down payment (25%+), higher home purchase price ( 10-25%) and higher interest (8%-12%). they will still check your credit and are looking for someone that has their credit and payment house in order now, even if it was not previously.
The facts of each case is different . Based on your situation I might be able to refer you to a lender or lenders that can help.
Your Local Expert
Central AZ Real Estate
And as suggested,
Call Kathy Morrow at CNN Mortgage 480-363-8901 she is a real pro.
Yes, there are ways to buy a home with bad credit and a large percentage down, but they are not through the normal channels such as FHA, Fannie or Freddie. The days of "Stated Income" or "No Doc/Qualify" are gone, and even then the only way you got those loans was with great credit.
So, what you are faced with is going with hard money loans (high interest rates) or seller financing (current owner carries the loan for you, usually at a somewhat higher rate than market rate), etc.
The Lender I work with, provides one of the best home purchase program in America. They provide FREE personalized and comprehensive counseling to Members to address your particular credit and financial issues and help determine a mortgage payment that you can afford. The counseling and underwriting criteria are â€œcharacter-basedâ€ and not based on credit scores and ratios. This enables them to fulfill their mission of assisting working people like you who otherwise do not have access to affordable credit. Consequently, the vast majority of the Members are low- to moderate-income many of whom have neither perfect credit nor substantial savings.
While they provide everyone with mortgage options, they also provide one extraordinary mortgage product! The mortgage is unique in that everyone that qualifies receives the same incredible terms, which makes homeownership affordable, and you do not need perfect credit.
â€¢ No Down Payment,
â€¢ No Closing Costs (The Lender pays them and does not include them in the loan),
â€¢ No Lender Fees,
â€¢ No Pre-Payment Penalty,
â€¢ No Mortgage Insurance,
â€¢ No Perfect Credit,
â€¢ Fixed 30 year below market rate at 3.5%
If you would like more information about this Program please contact me.
Vivien L Biggs PLC
Prudential Arizona Properties
Check MLS for homes on my website
I gave Bill a thumbs up and want to echo his suggestion. If you have the capacity to come up with a large down payment, I would really focus on fixing the credit issues. Get some advice on doing this because some of the rules are counter-intuitive.
Some basics are to pay bills on time, pay down high balances to 1/3 or below, dispute errors in writing with each credit reporting agency who lists them, use credit regularly...but pay off the balances when you do. Credit is like a muscle that must be used properly to be strengthened. A late payment is equal to reinjuring the same spot. Don't close any accounts and be careful with old collection accounts, sometimes leaving them alone is better than paying them off, at least until you close on your new mortgage.
Having your credit rebuilt and maintaining it will pay back dividends for you in the future beyond just being able to qualify for a mortgage at a great rate. I don't know why your credit is bad, but many good people have gone through tough times. The key now is to take advantage of the good times to set yourself up well for the future.
You may find the following a great resource for you at this time. Lenders who have a history of investing in the community through small business loans and mortgages, have a real interest in growing home ownership. Most will have consultants who will create a financial plan that willl correct your credit trajectory. Give the "A" or "B" graded local lender a call. Simply enter your destination zip or city name to locate a lender.
Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group, Palm Harbor, FL