What if you have no down payment and your credit is bad? Can you buy a home that has been foreclosed on? And how?

Asked by Ectempleton, West Memphis, AR Mon Oct 11, 2010

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Lisa Thorik…, , San Diego, CA
Tue Oct 12, 2010
I'm supposing since you don't have a down payment, you don't have cash.
In that case, the lease to own option (from a seller who is in a position to hold a note) means less money up front, The terms will be very important. Real Estate Attorney in consultation advised.

A foreclosed property is now under the direction of the lender or an agent of theirs to be sold. They often have detailed lengthy addendum to the original purchase contract stating the terms which you must agree to in order to proceed. Often includes the prop. being "as is". Meaning they will not make repairs. Closing costs are likely to be thousands of dollars which the buyer has to have in cash.

Since there is a great deal of uncertainty in the real estate market , perhaps a cautious approach of savings and building back your crredit should be the first step. Purchasing does not usually recoup the expenses and become profitable for 3 or more years. Be sure you are going to be in the area for that amount of time.
Web Reference:  http://www.lchometeamsd.com
1 vote
Tue Oct 12, 2010
Yes you can. By paying cash :)

Andrew and Elena Ollick
Amerivest Realty
Latest Post: Foreclosure Halt creates Problems
1 vote
Kevin Olson,…, Agent, Colorado Springs, CO
Mon Oct 11, 2010
The process for buying a home that has been foreclosed on is much the same way you would buy a regular home.

With no down payment and bad credit, things don't look great but the only way you will know for sure is by talking with a lender. Talking with a lender will not only give you an answer (if there are lending programs available they should know about them), but if the answer is no you can find out what to do in order to qualify in the future.

Best of luck to you,
1 vote
Dana Lindberg, Both Buyer And Seller, Phoenix, AZ
Sun Oct 6, 2013
Most likely, no. Lenders or banks will look at your credit score and the capability to pay before they lend you money. If you have a low credit score, the more you need money for down payment.
Why not rent first and build your credit score?

Dana Lindberg
CFS Mortgage - http://www.cfs203k.com
0 votes
My NC Homes…, Agent, Chapel Hill, NC
Thu Oct 3, 2013
If you have lousy credit and no down payment you're kidding yourself that you're going to by a home. You aren't going to be able to get mortgage and you don't have the money to pay cash, so how do you expect to buy a home. You need to stop wasting your time and start improving your credit and saving up money.
0 votes
Scott Godzyk, Agent, Manchester, NH
Thu Oct 3, 2013
Probabily not, you should start by meeting a local and trusted loan officer who can pre-qualify you at no cost and let you know if there is a program for you. The rule of thumb is the worse your credit, the more you need down.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Thu Oct 3, 2013
This question was posted Oct 11, 2010.
ECT has had sufficient time to FIX THE BAD CREDIT and demonstrate budget control.
Now you can buy a foreclosed home.
0 votes
Thula Thomas, Agent, West Memphis, AR
Thu Oct 3, 2013
You may not want to see, but you need to take a look at your credit score and not just from one bureau. You'll need to get a copy of your credit report and credit score from each of the major entities. Some of the people that I have worked with had credit ratings that were better than they thought. Even if it isn't good you need to be aware of what's there and what the damage is. Depending on your lender, you may have to get some explanations or clear up some issues. Typically, you need to have a FICO score in excess of 640 to qualify.
0 votes
, ,
Tue Nov 16, 2010
Hi Ectempleton

For FHA and VA loans. You need a min credit score of 620-640 for most lenders. If you're currently serving in the United States military or a honorably discharged veteran, surviving spouses and/or member of the Reserves or National Guard you can obtain VA Loans that requires 0 down. If you and the foreclosed property meets USDA requirements, you can apply for this 0% down loan product as well.
0 votes
Rita Fong, Agent, Marion, AR
Tue Nov 16, 2010
There are a couple of loan programs to use in West Memphis that does not require down payment, but you still have to meet the minimum credit score requirement which is 620. If you are not sure about your score and report, I will recommend you to talk to a lender to go through your credit report with you. You need to find out what items you need to work on, so you can improve your credit score.

Please feel free to email me for more details: ritafong@remax.net I will be glad to help you.
Web Reference:  http://www.ritafong168.com
0 votes
Lori Lincoln, Agent, Dighton, MA
Mon Oct 11, 2010

I don't know of a lender around that would finance a person with poor credit and no money. I will add that some people think their credit is bad. Most foreclosed homes require 203k for repairs. Most loans require 620 score or higher. You should pull your score to be sure you really do have bad credit.
0 votes
Don Tepper, Agent, Burke, VA
Mon Oct 11, 2010

If you have no down payment and your credit is bad, you can't buy. At least not a foreclosure. If it were a property owned by an individual, you could try a lease-option. Or a subject-to. But neither will work with a foreclosure.

Basically, the bank wants to sell the property. You're not able to buy it. Look: Talk with all the lenders you want. "I have no money for a down payment and my credit is bad." Sorry, but that won't get you very far. There's no magic solution. You have to save up some money and improve your credit.
0 votes
Leslie Wood, Agent, Douglasville, GA
Mon Oct 11, 2010
While I am not in your area, my suggestion would be to find a local realtor and find out who they use for mortgages. Contact the mortgage loan officer to see exactly where you stand credit wise. Again I am not certain of your area but there may be programs available to assist with no down payment. I still suggest finding a local loan officer in your area, let that be your first step then move on from there. Hope that helps.
0 votes
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