Question Details

Robin, Home Seller in Rocky Hill, NJ

With the current market/mortgage concerns, is it still possible to get a loan if you have at least 20%

Asked by Robin, Rocky Hill, NJ Thu Apr 24, 2008

downpayment and excellent income (150K) even if you have poor credit?

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Though the banks have become more strict in their guidelines for their loans, it all comes down to risk. The bank would want to see how much money you have in reserves( you account) in case you should lose your job. The bank would also limit the amount they could lend you. I believe it's a good idea to keep your monthly mortgage payment below 30% of you take home(after tax) income. The 20% down is huge because it means you start off with some equity in the house in the unfortunate event the homes value goes down a little. I would say you could definately get a loan to buy a home with your guidelines, but you need to talk with a lender to answer any individual questions as well as the amount you may qualify for. I tried to break this answer down in a way that makes sense to me. Hope this helps you to have a better understanding. Feel free to contact me with any other real estate related questions.

make it a great day,

Josh
0 votes Thank Flag Link Thu Apr 24, 2008
Absolutely---------Your best plan of attack is to establish a relationship with a local lender, that knows your credit history.
0 votes Thank Flag Link Thu Apr 24, 2008
It definitely depends on the size of the home you want to buy. With 20% down and a good income, you afford a decent house without having the interest rate hiked on you too badly. Of course, if you want to stretch how much house you buy, then you will pay the consequence (literally), or perhaps be denied.

The more you put down, the lower your rate of interest will be. A good way to add a couple percentage points to your downpayment without stretching the budget is by getting a buy-side commission rebate from your real estate agent. This page has some details: http://www.seekingagents.com/?about_us&cms&show=faq_…
0 votes Thank Flag Link Thu Apr 24, 2008
Most likely you will be able to obtain a mortgage, however, you will pay a higher interest rate if you have poor credit.
0 votes Thank Flag Link Thu Apr 24, 2008
It is possible with 20% down. You may have to either a mortgage broker or go directly to your personal bank to get the financing. The new mtg guidelines are taking a look at credit scores and basing the rate to charge on that. You may want to inquire about FHA loans who look at credit less discrimnantly.
You may also contact a credit restoration company to give you some assistance to fix your credit prior to obtaining a home. Best of Luck!!
0 votes Thank Flag Link Thu Apr 24, 2008
There are lenders who will look at your total history of of debt. If you have an excellent income and have 20% down, their main concern would be if you would pay the mortgage. You should pull all 3 of your credit reports and examine, first of all, if there is any incorrect information. If there is, you can challenge it and ask that it be removed (must notify all 3 credit reporting agencies). They will then issue an inquiry to the vendor that is claiming you had poor credit with them, will advise them that you are protesting it, and they will have 30 days to tell their side. If the vender does not get back to the credit reporting agencies within the 30 days, it is my understanding that the reporting agencies are required to remove the negative information. Sometimes, there will be things on your credit due to someone else have the same name or a similar name. If you have "legitimate" bad credit items on your record, PAY THEM OFF NOW even if you think you already did! You can put a note of explanation into your file about it. If they are not too serious, you missed one credit card payment on one account in 5 years of having the card, point that out to the lender. Insist that they look at your total profile. CONSIDER GOING TO A LOCAL BANK OR CREDIT UNION that knows you, your employer and ask them to check your rental history and your history of paying your utilities. These are ways to CLEAN UP YOUR CREDIT (do not ever pay someone to do it - that's a scam) so that you can get a house. NOW IS A GREAT TIME TO BUY. PRICES HAVE FALLEN ALMOST EVERYWHERE! Good luck to you.
0 votes Thank Flag Link Thu Apr 24, 2008
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