Mr. Pollack is correct, MrsTaylor1127. And what is your definition of not having good credit? Is it because you have defaulted on several accounts? Or is your credit history not mature or extensive?
There may be one or two programs that may help people that have a â€œfairâ€ credit score, but these cases are rare and would require jumping a lot of hoops to obtain approval for a loan. In addition, it may not be worth going this route, as you would be losing out on being rewarded a decent interest rate. This day in age, to obtain a loan with a negative score would be the equivalent of having a sub-prime mortgage from years ago: large, beautiful home courtesy of majority of bank financing satisfied with outrageously high interest rateâ€¦maybe even an ARM. You would ultimately be setting yourself up for failure with costly payments and paying more for a home than it would possibly be worth. I can imagine you donâ€™t want to throw your money away.
When the housing market began to crumble in 2007-08, not to mention the failure of many banks, the financial industry became fearful of lending, and what was once an uncomplicated industry to come into, homeownership now resembles a secret society. Banks are extremely strenuous of their requirements and as a rookie in the field you must come with your best game. Be patient and take a year to recover your credit. Again, as Bill stated, if you have income, you should be able to maintain good â€“ if not GREAT â€“ credit. Plus, lenders want/need to see 12 months of â€œgreen marksâ€ on your credit report â€“ in other words, consistency of payments (no 30/60/90 days of late payments, charge offs, settlements, etc.)
It can be just a matter of months of responsible and consistent payments and lowering of debt that can lead to increase in score. Trust me. Real life example: this past summer, I lowered my debt by $13K in three months, and witnessed a â€œjumpâ€ in my credit score by 39 points. Of course, this was by having not one but three incomes, as I have one full-time and two part-time jobs. These jobs were not to have â€œextra moneyâ€, but were obtained strictly to pay down in credit card and student loan debt I had accrued. Keep in mind that you have a goal you want to obtain, so irresponsibility is NOT an option. If you have to cut the â€œlittle thingsâ€ (a short term adjustment) such as eating out and shopping, then do so. Nevertheless, pay down your debt. Also, if you are able, pay more than the minimum. This way, you are able to save money by paying more towards principle balances and less towards interest charges.
Implement a project, starting with September 2012. This would consist of reviewing your credit report/history, paying down debt, having your taxes in order, copies of bank statements of savings and checking accounts, and copies of pay stubs. ïƒŸYes, all of this IS part of the home buying process! By September 2013, you should be scouting properties and begin the process for pre-approval for financing.
Again, patience is the key. Homeownership is fulfilling and rewarding. It has the potential to become â€œThe American Dreamâ€ once again, but you must be realistic and WIDE AWAKE in achieving it.
P.S. â€“ You can review your credit and implement your financial goals by visiting this website: http://www.creditsesame.com/.
Itâ€™s FREE and is awesome. Good luck to you!