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-   -   How to buy a house with bad credit, no credit, and no money down (https://www.askmehelpdesk.com/real-estate/how-buy-house-bad-credit-no-credit-no-money-down-111012.html)

  • Jul 18, 2007, 04:53 AM
    boop21197
    How to buy a house with bad credit, no credit, and no money down
    I'm a mother of two, one 22 who is going to have a baby in oct. who is with the daddy of the baby, he is trying very hard, working all the time. But most of his money is going towards the baby.
    Then one 17 who is mildy mental retarded,
    They all live in a one room basement apartment.
    They really need a 3 bedroom house.
    Is there any such thing as getting a house with bad credit, no credit, and no money down, if so were?
    They can afford to pay 600.00 a mo.
  • Jul 18, 2007, 06:02 AM
    ScottGem
    Try Habitat for Humanity. But without a decent credit history or a large down payment a house is out of their reach.
  • Jul 24, 2007, 11:03 AM
    LearningAsIGo
    Ditto Scott. There are several agencies that can help them get into government housing...
    Basically, apartments that charge rent based on how much they earn. .

    Example: one person may pay $500/m for a one bed apartment, the next person will pay $450/m for the same apartment--its based on the individual.

    Act fast, those usually come with a 1 year waiting list at minimum. Renting would be their best bet; owning cannot happen under those financial circumstances
  • Jul 24, 2007, 11:06 AM
    nauticalstar420
    Quote:

    But without a decent credit history or a large down payment a house is out of their reach.
    Wow, that doesn't make me feel good about my chances either :(
  • Jul 24, 2007, 11:12 AM
    LearningAsIGo
    I think the best chances are having either 1. excellent credit or 2. a BIG down payment. You can get away with a small down payment (5% - 20%) or with an 80/20 loan... but not with bad credit on top of it.
  • Jul 25, 2007, 07:28 PM
    DianeV Sr Loan Officer
    Bottom line folks is the credit... if you have REALLY good credit , you can buy with no money down. Good credit needs 3%-5% down. If your credit is bad, doesn't matter how much down... not going to happen in the conventional market. Usually sub -prime will do it. At a much higher rate.

    Government housing (Section 8) is probably a good alternative. However, I am not sure of their credit requirements.
  • Aug 12, 2007, 09:23 AM
    Mortgage and Credit Consu
    I had to answer this question , I am a Mortgage and Credit Consultant, as well as real estate Investor.

    Step 1. Get Pre-Qualified

    Step2. Find the house you pre-qualify with a LOT of equity

    Step 3. Ask the seller if they would cover the closing costs and hold a seller second

    Step 4. If the house has equity ask if they would be willing to give you the equity at closing.

    Step 5. DON'T LET ANYONE TELL YOU THIS CAN'T BE DONE OR THIS IS ILLEGAL,OR YOU WILL NEVER OWN A HOUSE.

    SCENARIO:

    CREDIT SCORE: 565

    QUALIFY FOR A HOUSE FOR $150,000

    LENDER APPROVES YOU FOR 80%

    YOU WOULD NEED 20% DOWN TO EQAUL 100%

    ALSO NEED 6% FOR CLOSING COSTS

    ----------------------------------------------------------

    TO ACCOMPLISH YOUR DREAM:

    LENDER GIVES YOU 80%

    SELLER HOLDS SECOND , WHICH IS THE 20% DOWN SO YOU NEED NO DOWNPAYMENT (ALSO ASK SELLER TO FORGIVE THE SECOND AFTER THE DEAL IS CLOSED)

    SELLER COVERS YOUR CLOSING COSTS 6%

    AND YOU WENT INTO THE DEAL WITH YOUR CREDIT AND NO MONEY DOWN,

    OH LAST BUT NOT LEAST, SELLER HAS GIVING YOU THE EQUITY IN THE HOUSE, WHICH GOES TO A THIRD PARTY (TRUST ACCOUNT, OR FOR REPAIRS,ETC... )YOU PUT THIS INTO AN ACCOUNT TO PAY YOUR MORTGAGE FOR A YEAR,


    THE REST YOU WORK TO FIX YOUR CREDIT AND BUILD YOUR INCOME, ;)


    THANK YOU,
  • Aug 12, 2007, 09:38 AM
    excon
    Quote:

    Originally Posted by Mortgage and Credit Consu
    SELLER HAS GIVING YOU THE EQUITY IN THE HOUSE, WHICH GOES TO A THIRD PARTY (TRUST ACCOUNT, OR FOR REPAIRS,ETC...)YOU PUT THIS INTO AN ACCOUNT TO PAY YOUR MORTGAGE FOR A YEAR,

    Hello consultant:

    And, I just had to respond.

    I agree with you that there ARE creative methods available to the OP. I think you have the right idea too... But, you're missing something.

    In the first place, a seller looking for a credit challenged buyer is in BIG trouble himself. He probably is upside down and has NO equity. But, if he DOES have equity, why would he give it away?

    The next problem I have is IF the seller DOES give the equity away, it ISN'T cash and can't go into a bank to pay for anything.

    excon
  • Aug 12, 2007, 09:46 AM
    Mortgage and Credit Consu
    If that is the case ,why am I closing on a 1.2 ML dollar deal in Tx right now , client credit score of 576, seller holding the second and covering the closing costs, see as I said in my answer before if I listen to people that comes off that this can't be done,


    I wouldn't be in my house now, and as well as my clients, the whole trick to the whole thing, is to understand that once you are in work on your credit , pay your mortgage for a year, and in a year Refinance with a better credit score,

    Most sellers these days look for a pre-approval letter or Proof of Funds, I have been doing this for 3 years and no problems, and just like now with the sub prime market a lot of LOAN OFFICERs got nervous, but not I , so I thank you for your opinon, but until I can't do what I am doing and fail at what I do , then I don't see any other way, thank you
  • Aug 12, 2007, 09:57 AM
    DianeV Sr Loan Officer
    My point exactly ExCon. Listen up Boop, I have been around a long time and there isn't too much I have not seen in this business. You don't need this kind of crappy loan. First of all, if the seller holds a 2nd there is no cash equity to give you. Second, if he holds a second and forgives it, he's nuts. Why would he? And on top of that you want him to pay closing costs. You are looking for Santa Claus on this one. He would be making no profit on the house. You would need a much higher score to qualify for an 80%20% loan to begin with or your interest will be out of sight. Before you know if you will be in foreclosure.

    Do not do this! I don't care if it's legal and can be done. As a loan officer, I am supposed to guide you to homeownership, not bury you. Everyone wants to own a home and it can be done. But sometimes it takes time.

    Go and sit with a reputable mortgage originator. Give them your income and let them qualify you for a loan. I can tell you that $ 600 a month is not going to buy much. Property taxes and insurance are part of the payment and considered when qualifying for the mortgage. I have spoken with many people in your situation and after doing what I explain they call back in about 6months to a year and can go forward with a decent mortgage at a decent rate. You want a dream not a nightmare!

    A few questions I would ask. What is hourly wage and what did they gross last year and year to date? Any money available for down payment? What state are you in. (There may be grants available.) Is there any SSI or child support coming in, in addition to regular wages. Let me know. I will try to help you. dvitalo@aol.com
  • Aug 12, 2007, 10:02 AM
    excon
    Quote:

    Originally Posted by Mortgage and Credit Consu
    If that is the case ,why am i closing on a 1.2 ML dollar deal in Tx right now , client credit score of 576, seller holding the second and covering the closing costs,

    Hello again:

    Well, I suppose you're doing it WITHOUT the seller giving you equity, because sellers don't do that - and THAT is the problem.

    If you re-read my post, the giving of equity and depositing it in a bank is where I'm having trouble. Nothing else.

    Can you address that factor, please??

    excon
  • Aug 12, 2007, 10:03 AM
    DianeV Sr Loan Officer
    To Mortgage Consultant: While you may have been doing this for 3 years, keep in mind that the market for the past five years has been the fluke. This is the real market. I have been doing this since 1982 and while I appreciate your creativity, you and I both know that the seller figures the worse that can happen is when the guy screws up he can foreclose and get the house back. I am assuming the seller is NOT forgiving the 2nd on this one. Why would you make a Million dollar deal with someone with such a low score? If he is making enough money to qualify, his score should be higher. If it isn't, I would wonder why. Please let us know if the seller forecloses on this. Fixing up one's credit should not be done by taking on a million dollar loan.
  • Aug 12, 2007, 10:06 AM
    Mortgage and Credit Consu
    Look why are trying to compete or even bash, I am just saying what I do and would do, it is up to them on what they decide to do, none of my clients are in foreclosure, we have over 300 lenders with our company who have different types of loan programs and I used the 80% for an example, not to say you would get an 80, it could be 70, which ever,

    It just kills me that if I am doing this and have not had any problems with my clients or sellers whom I match up together and everyone walks away happy, then why I am successful at what I do, I am for the client as well, I do not and will not put a client in a situation to hurt them, I first look at it first, this is nuts to go back and forth like this,

    I have deals and houses to close on, all I was just doing was giving advice on what worked for me, when I had a low score and everyone told me it couldn't be done, and loan officers wanted to charge high points cause of my score, I am a mortgage consultant and CREDIT CONSULTANT, REAL ESTATE INVESTOR, and I use what I have learned to help others, thank you
  • Aug 12, 2007, 10:14 AM
    excon
    Quote:

    Originally Posted by Mortgage and Credit Consu
    look why are trying to compete or even bash

    Hello again:

    You keep talking about YOU, and how you think you are being bashed. Get a life.

    I don't care about YOU or how successful YOU are. There are lots of BS's around who make money. I want you to address the DEAL you said you do. If you can't, and you had three posts wherein you didn't, you're full of crap.

    excon
  • Aug 12, 2007, 10:14 AM
    DianeV Sr Loan Officer
    I am not trying to bash you. However, what you are doing is probably for a more sophisticated buyer. But let's face it, how many of your 300 lenders have closed recently? Many of these brokers are using subprime lenders and there is no way you are going to convince me that there will be a decent rate on this type of loan. If so, then I am sure a full 6% will be needed for closing costs to cover the points or broker fees involved. A 0 point closing would only be 3-4%.

    I have been through the major financial crisis in the northeast where many people lost homes in the late 80's and early 90's because of this type of creativity.

    While you are trying to help, you are giving some false hope. There is much more involved in their situation.

    I wish you well and hope you make a lot of money. But a little knowledge can be a dangerous thing.
  • Aug 12, 2007, 10:15 AM
    Mortgage and Credit Consu
    Also if you watch Good Morning America even people with Good Credit are in foreclosure, and yes there are sellers who are giving the equity up in their house, key is MOTIVATED SELLERS, who either want to move, or want to sell,

    The sellers that will not do it, are not motivated sellers or do not understand, I have a client right now moving into a 143,000 home, and the seller is giving equit, holding the second and forgiving, also covering closing costs, and what the seller is asking for he is still receiving, EXCON, if you want to know more e-mail me directly and I can tell you,

    Oh and to answer the other question, once the seller at the time of closing forgives the second, the house is no longer the sellers it is your's thank you and have a great day

    On the million dollar home the seller forgave the 2nd, I can e-mail you the contract as proof, I am a person who believes any and everything can be done, until I see it can't,

    Also the house has 400K in equity and once again this is a motivated seller who wants to sell, to get rid of this house, because he has another house he wants to buy, so yes he gave up the equity,
  • Aug 12, 2007, 10:20 AM
    DianeV Sr Loan Officer
    I am not going to argue with you. Let's just leave it that I really think there is more to this story...
  • Aug 12, 2007, 10:22 AM
    excon
    Quote:

    Originally Posted by Mortgage and Credit Consu
    EXCON, if you want to know more e-mail me directly and i can tell you.....

    house has 400K in equity and once again this is a motivated seller who wants to sell, to get rid of this house, because he has another house he wants to buy, so yes he gave up the equity,

    Hello again, Credit dude:

    If you can't tell me publicly, in front of God and everybody, you can't tell me period. And now, you're telling us that someone just gave you $400K in equity?? Where did you deposit it?

    Dude... Really now.

    excon
  • Aug 12, 2007, 10:26 AM
    DianeV Sr Loan Officer
    I'm sorry, I just can't stop. What kind of seller would just give up $400,000 in equity?

    The market is on a downswing, properties are depreciating... and in spite of Good Morning America, facts are facts. I don't know what kind of lenders you are using, but I have worked for mortgage lenders, mortgage brokers and major banks.

    What am I missing? Is the seller writing off the equity as a loss? I don't know how you are getting around the lenders with the equity thing. A gift of equity can only come from a family member...

    You must have some pretty financially secure sellers...
  • Aug 12, 2007, 10:27 AM
    DianeV Sr Loan Officer
    Or... a lot a "family member" giving gifts of equity...

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