Help! I want to buy a house, but I have terrible credit...

[guthhog]

     My wife has a decent credit score, but mine is pretty bad.  We have a combined income between 85,000-90,000, and have about 10,000 in our bank account.  We would be first time home buyers.  Does anyone have any advice, it would be greatly appreciated.

[ErieHog]

Don't buy?

Save your money.  The bigger a downpayment you can put up (say, $50K),  the more comfortable banks will be lending to you.   If you'd been in this position even 12 months ago, you'd probably have been able to get a loan pretty easy.   Now, you are going to be looked at like green meat.

[Road_Hog]

Don't buy?

Save your money.  The bigger a downpayment you can put up (say, $50K),  the more comfortable banks will be lending to you.   If you'd been in this position even 12 months ago, you'd probably have been able to get a loan pretty easy.   Now, you are going to be looked at like green meat.

I doubt someone is going to be here asking for advice and get $50K in liquid cash just like that.  If it were me, I'd look at what may be causing your credit issues.  Perhaps use this as an opportunity to pay down some debt.  Building up your savings is a good idea.  I don't know that you have to get to $50K but you need some liquid cash.

Have you asked the bank what you'd need to do to get qualifed?  Check out your debt-to-income ratios and other items.  You want the house to be a blessing, not a burden.

Is your income stable, i.e. salaried positions?  Or is it commission generated?  From the banks perspective, it might be that you have to decide between a car payment and a house payment.

One last thing to keep in mind.  The bank (at least in times past) will loan much more than you should ever take on.  If they are saying no, listen to them.  Finally, don't get a junk loan.  Get a fixed rate mortgage. 

[ErieHog]

I doubt someone is going to be here asking for advice and get $50K in liquid cash just like that.  If it were me, I'd look at what may be causing your credit issues.  Perhaps use this as an opportunity to pay down some debt.  Building up your savings is a good idea.  I don't know that you have to get to $50K but you need some liquid cash.

Have you asked the bank what you'd need to do to get qualifed?  Check out your debt-to-income ratios and other items.  You want the house to be a blessing, not a burden.

Is your income stable, i.e. salaried positions?  Or is it commission generated?  From the banks perspective, it might be that you have to decide between a car payment and a house payment.

One last thing to keep in mind.  The bank (at least in times past) will loan much more than you should ever take on.  If they are saying no, listen to them.  Finally, don't get a junk loan.  Get a fixed rate mortgage. 

Note the first line of my recommendation-- don't buy.   Wait until you have some capital, then re-examine your needs vs. your desires.

[riccoar]

Although I believe now would be the time your going to get the best deal, prices are not exactly skyrocketing back up.  Due to politicians tanking the mortgage system you can guarantee that your going to have to put something down.  That amount will be based largely on your credit score.  I would start by going into your bank and asking someone in the mortgage department to give you a basis on where to start.  As in running your credit, asking what you would qualify for price wise, what kind of APR your credit will get you, how much money you will be required to put down, and what kind of closing costs your looking at.  You also need to figure insurance costs.  Once someone can give you a number, you bounce that up against your budget.  And no, I don't work at a bank.  I've bought and sold a couple houses along with having friends who are in the process of getting a loan for a house.  Banks are pretty damn gun shy right now in who they will loan to.

[IronHog]

     My wife has a decent credit score, but mine is pretty bad.  We have a combined income between 85,000-90,000, and have about 10,000 in our bank account.  We would be first time home buyers.  Does anyone have any advice, it would be greatly appreciated.

I have some top notch southern loblolly pine timber that I will trade you cheap.  You can have someone saw it for you and build your own house. 


No dollars.  I take euros, gold, ammo, chickens, spam, or anything that might be valuable to a mexican drug lord.

[HognotinMemphis]

     My wife has a decent credit score, but mine is pretty bad.  We have a combined income between 85,000-90,000, and have about 10,000 in our bank account.  We would be first time home buyers.  Does anyone have any advice, it would be greatly appreciated.

Get in your time machine and set the date at any time from 2004 to 2007. Then go to your local bank or mortgage broker and they will give you a "no doc" home loan of your choice...ARM, fixed rate, et al and you only need to tell them you have a job.

[guthhog]

     Thanks for the advice(even the tongue in cheek comments) +1 to all if I could.

[IronHog]

     Thanks for the advice(even the tongue in cheek comments) +1 to all if I could.

If you want a serious comment I'd look for a local bank wanting to keep mortgages.


Have one of your parents co-sign if they have good credit, but try to work a deal with the bank where you become the guarantor of the loan in a year or two once you have established a payment history.


Oh, and I was serious about trading the timber.  Times are hard.

[guthhog]

   

If you want a serious comment I'd look for a local bank wanting to keep mortgages.


Have one of your parents co-sign if they have good credit, but try to work a deal with the bank where you become the guarantor of the loan in a year or two once you have established a payment history.


Oh, and I was serious about trading the timber.  Times are hard.

     Actually, building a house might be a good option.  I am a skilled tradesman and could probably do alot of the house myself.  I know other tradesman as well,  but I dont know if I wanna spend my evenings and weekends working lol.  Thanks for the offer, though.

[snoblind]

You can get a loan on your wife's score alone, but most banks would only count her income.  Since you are a first time home buyer there are programs such as FHA that are more forgiving on the credit score. Save for the downpayment, and work on getting your score up.  Don't know where you are located, but there are services that can counsel and assist you in doing this that are FREE.  don't pay for the help.  I agree with Ironhog on looking for a bank that will work with you.  Be careful with mortgage brokers, some are great, others are crooks - even more so with the internet and TV deals.  always make sure someone willing to give you a loan is willing to give you a good faith estimate up front without you signing up first.  If they aren't willing to put all your costs on paper, RUN FOR THE DOOR. 

[IronHog]

  


     Actually, building a house might be a good option.  I am a skilled tradesman and could probably do alot of the house myself.  I know other tradesman as well,  but I dont know if I wanna spend my evenings and weekends working lol.  Thanks for the offer, though.

I've known people that were skilled craftsmen who budgeted and cashflowed a house by paying for materials and labor as they went while doing most of the work on evenings/weekends.

It took most of them several years, but you can move in a very nice house with no debt that way.

I'm an not aware of anyone putting the materials on credit cards and then filing bankruptcy but that was a rumored scheme among young professionals several years ago.

[PORKINATOR]

Owner financing, buy from an individual who owns his home and is motivated to sell.  Or lease to own/buy direct from a builder with unsold houses for sale, both are viable and accessable these days. Credit rating is less important to these folks than job stability, income to debt ratio and downpayment availability.