hello folks! well i havent posted in a bit. but i would like to know if any of you have been able to purchase a house with bad credit?. no money down? what are some of the lenders out there if any that do not require you to have good credit. thanks!
do you qualify for any of the down payment gift programs such as nehemiah ? Can you qualify for FHA? Julie
I talked to Full Spectrum yesterday about doing a 100% loan. They said the minimum middle score they require is 660 for the no-down. Otherwise, it's 10%.
In general you need a middle FICO of at least 580 to qualify for 100% financing. With that credit score, you're looking at a sub-prime loan with hefty rates. I had one company tell me they can go as low as 560, but I have yet to close a loan with them. Sometimes these reps exagerate to try to get broker business, so I take that with a grain of salt. If you can qualify for FHA, you can get the effect of 100% financing if you use one of the gifting programs such as Ameridream or Nehemiah. These work by having the seller make a "donation" to the gifting company who then makes a "gift" to you to cover the cost of the down payment minus a transaction fee. This is a loop-hole designed to get around the FHA rule that says the seller can't gift your down payment. Other options include sub-prime financing with a seller carry-back. A typical scenerio would be the mortgage company finances 80% of the purchase, and the seller holds a second mortgage for the rest with the understanding that he wil get monthly payments, and you will refinance within a few years to pay him off. Often these seconds are written as a balloon. Another option is seller financing. There are people who buy investment properties and sell them to people who don't qualify for financing on their own. They charge a high rate, but there is no credit check.
Re: Re: Buy A House With Bad Credit? Can you please list lenders that 100% finance with that FICO score? I leave in the NY Metro Area! hreid3
Re: Re: Re: Buy A House With Bad Credit? I've got a list, but I don't think it would help. When I do these loans, I have to broker them. That means I work with the lender through their wholesale division. For some reason I never really understood, these companies offer different programs through their wholesale divisions than they do through their retail side. Many of them don't even have a retail side. What you need is a good mortgage broker who's experienced in sub-prime loans. To find one, I'd suggest you start asking your friends, family and co-workers who they've used and liked. Make a list, start calling them asking, "My middle FICO score is...can you help me get 100% financing on a home purchase?" If the broker says no, he doesn't deal in sub-prime. Also keep in mind that 100% financing doesn't always mean no money out of pocket. 100% of the purchase price may be financed, but there are still closing costs, taxes and escrow deposits. These can be negotiated with the seller, so you need a good Realtor who knows exactly what you have to work with. Good luck!
Re: Re: Re: Buy A House With Bad Credit? Here is a question. What credit score is the dividing line for an A paper loan. My business partner said 620 for A grade paper. His idea of A grade paper would be 100% financing at a good interest rate. Is this so? Rob
Re: Re: Re: Re: Buy A House With Bad Credit? 620 is actually a pretty low credit score. Your better programs for 100% financing are going to start at 660 to 700.
I may be able to refer you to a lender. I am a loan originator with a national company which does not do sub-prime loans, however I went to a seminar on Saturday and met a terrific sub-prime lending company. Contact me. fayfranklin@socal.rr.com
