Obviously, with the Home Ownership Program, any First Time Home Buyer bad credit can qualify – eventually. Truly, it’s not that hard even with bad credit or no credit. In the first place, it’s important to get going in the right direction. Indeed, you have to understand where you are. In this manner, you can get to a place of homeownership.
What Is First Time Home Buyer Bad Credit?
Usually, bad credit is the stuff of “non-payment” or bad debt. Moreover, it’s the non-payment stuff which reports to your credit report. In many cases, things like collections, charge off accounts, repossessions is bad credit as well as ID theft. Unfortunately, it becomes part of credit history and can have a haunting effect. In most cases, the credit score will reflect it.
Unfortunately, the more that reports in terms of “bad credit,” the more this history hurts your “credibility”. Really, what does that mean? In short, it the ability of lenders to have faith in your willingness to repay your debts. Furthermore, it also has a lot to do with how you manage your debts. As a matter of fact, it is really important to understand the principles of credit. Also, it’s equally important to understand how it impacts house purchases.
First Time Home Buyer Bad Credit to Good Credit: Understanding the Basics
No, don’t get this wrong. Mostly, bad credit for most First Time Home Buyers is a lot more than issues of “non-payment”. On balance, it’s a lot more than most buyers think.
Issues of non-payment and/or late payments
In any event, these are the leading, two major contributing factors that lead to bad credit scores. Certainly, that’s why it’s important to have good credit by disputing bad credit. Equally so, it’s important to have good accounts reporting NO late payments.
To see how you can best impact your credit score, use this credit score simulator by TransUnion. You can open an account with TransUnion also.
Home Sweet Home Solution: We can show you:
how to dispute bad credit, get bad credit deletions, i
First Time Home Buyer Bad Credit and the ID Theft
Unfortunately, identity theft issues affect many buyers
To say nothing of the pain and agony of resolving these issues, there is hope. Home Sweet Home helps First Time Home Buyers with resolving ID theft. There are special fill-in-the-blank forms to address those issues of forgery, unauthorized account openings, medical fraud, cell phone use and more.
Many of the forms Home Sweet Home shows First Time Home Buyers to use concerns:
- Actual Signature Match
- Identification Verification Proof
- Attorney Assistance Referral Program (which is very affordable)
Debt Ratios and First Time Home Buyer Bad Credit
The Front End Ratio
In general, this ratio is a determination of how much of pre-tax income goes to funding housing. All in all, this includes, principal, interest, taxes and insurance. Additionally, housing costs may also include homeowner association dues (“HOA”). Also, condominium, planned unit developments and high-end housing homeowners typically pay this fee.
First Time Home Buyer Loans with Bad Credit and Zero Down
Absolutely, there are loans that work great for First Time Home Buyers with bad credit and zero down. Many of these loan programs are no money down payment mortgages:
- US Veteran Loan Program
- 15 and 30-year terms available
- Zero down payment if scores are 560+
- Backed by the US Veterans Administration
- Funding Fee is required and can be financed – 1.5 – 2.4%
- Certificate of Eligibility is reqired
- 620 – 640 credit score is required
- Typically, USDA loans considered a “rural” or “rural suburban” loan
- “Farm” purchase is applicable
- 2% premium fee is required to be paid upfront (but can be financed)
- 15 and 30-year terms available
- Only eligible areas available
- Normally range is 580 – 620 credit score
- Offered thru the Fair Housing Administration
downpayment of 3.5% is normally required
- 15 or 30-year fixed or adjustable rate mortgage available
- An up-front mortgage insurance premium is required: .85% to 1.75%. This fee may be financed as part of the loan
- House must pass an FHA inspection
HomeReady Fannie Mae Loans
- Fannie Mae loan product
- Typically 620 minimum credit score required
- Works for little or no credit applicants
- Down payment as low as 3%
Conventional 97% LTV Mortgage Loan
- Normally, these loans are FHA “clone” loans
- Ideal for persons who have non-qualifying FHA credit issues
- Self-employed and business owner is ideal
- Lender requirements are similar to FHA
- Down Payment is 3%
Down Payment Assistance
On whole, Home Sweet Home provides down payment advice. Over all, this advice concerns the various plans and strategies for funding a down payment. Some of these include:
Rent-to-Own Assistance: Of course, Howe Sweet Home offers help with setting up a rent-to-own program. Furthermore, the use of rental credits to fund a down payment is important as well as covering closing costs. Usually, a rent to own program works well for first time home buyers who have bad credit or who are not loan-ready.
Correspondingly, there are down payment fundraising programs such as Feather the Nest is wonderful.
Also, Down Payment Resource is good site to use for down payment programs.