Subprime lenders are sinking faster than the Titanic these days. Still, people with bad credit (defined as FICO's in the 500's and low 600's) can still get a home loan. However, it's getting tougher. If your credit is very bad, be prepared to put some money down. Also, you can say goodbye to the "stated loan". Prepare to provide documentation regarding what you can and can't pay.I enjoyed this article in Newsweek about this subject. The author gave some very good advice at the very end:
"Many subprimes today want a minimum score of 600 or 620. So pay off as much debt as possible and don't let your credit-card balances go above 33 percent of their credit limit. And start saving for that down payment.
For those already in danger of sinking in subprime debt, try your best to stay afloat; a lifeboat may be on its way. Sen. Christopher Dodd says he plans to introduce a law that would essentially allow you more time to solve loan problems before foreclosure. In the meantime, lenders urge troubled borrowers to keep in touch. It's in everyone's interest, they say, to keep you in your house. Try to work out a deal—your home may depend on it."
Jennifer Bunker, CRS, GRI
Utah Real Estate Broker
1 comment:
You can buy a home with a bad credit record; you just need to find the right mortgage financing package. Before you sign up with the first bad credit mortgage company that offers you a loan, remember to research offers to be assured you are getting a fair deal.
Know Your Credit Rating
Know The Fees
Get Multiple Offers
Read The Fine Print
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