Where do people with poor credit go for a decent mortgage. Thanks.

Asked by Mj, Concord, CA Wed Sep 7, 2011

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Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Wed Sep 7, 2011
Hi Mj, I see you've been posting for a couple years here, and 2 years ago you were wondering about mortgages with poor credit as well. How do you know your credit is "poor" compared to what qualifies for a mortgage these days?

2 years is usually enough time for most people to improve their credit - so what has been going on with your situation that makes your credit still poor? Have you put in the effort to improve your credit by establishing credit and making your payments on time? It sounds like you may need someone better than whoever you've been working with to guide you on how to get your credit into better shape.
1 vote
Dan Tabit, Agent, Issaquah, WA
Wed Sep 7, 2011
Mj,
As someone who has been a lender and worked with lots of good people with tough credit, let me suggest your first step is to work on your credit. Whether you will qualify now or not better credit opens up more options and lower rates & fees.
A few years ago it seemed that anyone with a pulse could get a mortgage. Then too many people did and we have had the collapse of the housing and mortgage industry. These days there are few options for people with tough credit, the primary option is FHA.
FHA is available through all major lenders and most mortgage brokers & bankers.
If you choose to work on your credit first, my general advice is to establish and live with a budget for a while. Anticipate expenses like car maintenance & repair and budget for it. Build up as much savings as possible, more down payment equals more lending options. It will also insulate you from unexpected expenses.
Next, obtain a copy of your credit report from each of the reporting agencies, Experian, TransUnion and Equifax. You do not need to pay for this and you do not need to sign up for any services. Dispute any issues you find which are in error. Sometimes credit reports are inaccurate and until you correct the record, no one knows. Write letters to each agency disputing anything and where possible provide proof. Fixing Experian does not fix TU.
There are mortgage lenders who will assist you with the credit repair process and advise you as to your options. Consider some who answer here or talk to some local lenders.
1 vote
George Raymo…, Mortgage Broker Or Lender, Fort Worth, TX
Thu Sep 8, 2011
I can't tell you how I people I talk to who think their credit is so poor that they have talked themselves into a loan denial before even talking to a lender. Take my advice, pick up the phone and contact one of the lenders on this site and have your credit analyzed. It's painless! If you don't, you will not be in position to take advantage of the low homes prices and ridiculously low interest rates. One thing is for sure, most people with bad credit want to know one thing, and that is: "What's it gonna take in order for me to buy a home?" You'll never know until you take the first step. For more information regarding credit, click on the link below:


Best of Luck!
0 votes
John Arendsen, Agent, Leucadia, CA
Thu Sep 8, 2011
Thumbs up to Shane. Great very straight and forward answer.

No thumbs for Annette. I happen to be one of those "off the grid lenders" and have done lease options quite successfully I might add. It is indeed a very genuine and creative way for "challenged buyers".

"bite on one of these deals will set you back five years."? Would you mind qualifying that comment?
0 votes
Annette Law…, Agent, Palm Harbor, FL
Thu Sep 8, 2011
Buying a home when your credit is poor in incredibly expensive.
Exercising fiscal discipline and rebuild your credit score is most advisable....unless you have cash to burn.

Off the grid lenders (you know who they are, lease with option) have found a highly profitable niche market in giving loan challenged buyers the illusion of purchasing a home. The temptation, created by an unwillingness to do what you know you must, is tangible. To bite on one of these deals will set you back five years.

There are no shortcuts. Cut your spending. Reduce your Debt. Increase your income. No short cuts.
0 votes
Bill Eckler, Agent, Venice, FL
Thu Sep 8, 2011
When shopping for the best rates, responsible people with poor credit normally work hard to improve their credit prior to applying for a mortgage.
0 votes
Dp2, , Virginia
Wed Sep 7, 2011
They go to the sidelines--unless they opt to do a deal with creative financing.
0 votes
John Arendsen, Agent, Leucadia, CA
Wed Sep 7, 2011
Do yourself a big favor and don't worry about buying right now. Time is on your side. As others have suggested work on rebuilding your credit. The real estate market isn't going anywhere anytime soon. The only thing you have to do is keep your eye on the ball..................Interest rates.
0 votes
Marty Stern, , Sonoma, CA
Wed Sep 7, 2011
HI - My company offers a unique FHA loan program that works with buyers with low credit scores. You can come in as low as 500 with 10 percent down, or 580 or higher with 3 1/2 percent down. You ideally have to show at least a year of good credit (no new collections, no late payments) and you have to have strong income (and a secure job), some savings/cash assets, and manageable debt. Rates are about a half percent higher than standard FHA rates. For owner occupant homes only, max. loan amount $417,000. I'd be glad to discuss your situation with you. My email is mstern@magnifundgroup.com.
0 votes
Scott Godzyk, Agent, Manchester, NH
Wed Sep 7, 2011
Your best bet is to meet with a local and trusted mortgage broker, they can prequailify you at no cost, they will look at your credit plus your financials and let you know if there are any programs that you may quailify for. The most important thing is if you do not quailfy now, they can tell you what you need to do to be able to get quailified in the future.

http://www.trulia.com/blog/scott_godzyk/2011/08/how_do_i_kno…

Please see my blog for a list of additional tips on getting a mortgage
Web Reference:  http://www.ScottSellsNH.com
0 votes
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