Question:

How are we supposed to find a mortgage company...??????

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That is wiling to work with us, if we have bad credit??? Anyone know, we want to participate in a first time home buyer program, that include the foreclosed homes, but it's our responsibility to find that mortgage company that will lend to us...and we have BAD credit?????? Help??

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  1. Well, unfortuantely the climate in the mortgage lending industry is against you.  Lenders requirements are so tight that you have to have a perfect scenario in order to get financing.  People with good credit scores are having problems getting financing let alone people with bad scores.  Since sub-prime lending is pretty much non-existent the only lenders for people in your situation are called hard money lenders.  They are not cheap and rates start in the low teens.  Also, you will need around 30% down as they will not lend anything above 70% of the purchase price.  Even that scenario is hard to come by right now.  

    You could try and fix your credit but that can also have its draw backs.  Most real estate and mortgage professionals know nothing about how credit works.  They just worry about the score and the number of tradelines you have on your report.  Did you know that paying off past collections or bad tradelines can actually lower your score?!  Its true.  I don't recommend going to credit repair simply because it can't help you if you actually owe the debt.  Many credit repair services will charge you thousands in upfront fees to take off bad tradelines.  The problem is its illegal to take off tradelines you know that are valid and its illegal for the credit repairer to charge you for work he hasn't completed yet.  Just ask the FTC.

    However, you do have options.  The best thing to do is get as much down payment as you can.  The more down payment, the better your chances.  There are many private owners out there that will allow you to buy thier homes with creative financing.  I bought a home with a wrap-around mortgage.  My credit was bad and I needed a house.  I found a seller in the paper that was willing to allow me to buy the house using this method.  He had a mortgage on the property currently and had a $800 monthly payment.  We created a note for an agreed upon price and a $1100 monthly payment.  We recorded this note as a 2nd mortgage on the property and I was deeded on title.  Every month I paid my mortgage payment to my seller or lender through his attorney.  His attorney would deposit my check and send $800 to the lender holding the 1st mortgage on the property and the remainder went to the person that sold me the house.  Since I owned the property, I was responsible for taxes and insurance and upkeep as well.  The seller or lender if you want to call him that, just pocketed $300 a month.  About 2 years later I was able to refi the property and with a creative note modification previously agreed upon, I was able to payoff the private mortgage I had with the seller and the 1st mortgage he held on the property.  He got the difference between what he owed on the 1st mortgage and what I owed him on the private mortgage.  So he got the money he wanted out of the house plus all the mortgage payments I paid him over the previous 2 years.  I got the house I wanted and was able to sell it myself for a nice profit a few years later.

    Now in some situations, this is not possible.  Some states will not allow you to be put on title of a home if you are not on the mortgage.  However, you can accomplish the samething with a Lease to Own contract.  Your name wouldn't be on title but you would have the same rights as if you were the owner provided the seller agrees to put that on the lease.

    Another option is seller carried financing.  Let say you come up with 10% down on a home and you find a lender to give you 70% financing.  The seller can create a note for the remaining 20% and take payments until you are able to refi the property a few years down the road and pay him off.  In some cases, you might find a seller that would take payments on a house just like as if you got 100% financing.  This is rare and most seller's will want some type of downpayment (at least 10%).

    You will have to either find a real estate investor to help you or an attorney maybe.  Most real estate agents and loan officers will have no idea what you are talking about and they have no interest in helping you because they can't make a commission in this scenario.

    I hope this helps.  You might think this is hard to find but its more common than you might think.  You just have to look and be patient.  For sale by owner homes are good to inquire with and the newspaper is a great place to start.

    Good luck.


  2. Maybe you should think about clearing up your credit first so you look like you are worthy of a home loan. Then, maybe consider purchasing a home.

    It really amazes me the people I talk to everyday that think they are entitled to get into a home even though they have not paid on items on their credit report for years & get p/o'd because no one will help them, or they have to come up with a huge down payment.

    If you buy a foreclosed home, you will not be able to get into a home zero down. You will have to pay closing costs & a down payment.

  3. Good luck-banks are not willing to lend to those with less than steller credit anymore due to the current crisis with the banks. They are getting shut down and bank and mortgage broakers are being charged with all manner of crimes for making these loans in the past. This is the reason the market is tanking-if you don't have good credit, a steady income, and a good cushion of money to put down at closing you do not need to buy a house. Sorry-but that is the honest truth. We are in this mess now because folks who had no buisness getting loans got them and can't pay. Rent for a while, clean up your credit and buy when you are really truely ready and able to take on such a major investment without the govt assistance.

  4. If you have bad credit, you may be out of luck.  The industry is now reeling from the consequences of loaning money to people with bad credit.

  5. Try talking to a couple of mortgage brokers who have access to lots of different programs. Just keep in mind that wanting to buy a house and having the financial ability to buy a house are two different things. If your credit is really that bad you’re not likely to find an upstanding lender to work with you. Credit standards are pretty tight right now.

    You could potentially help yourself if you can come up with a large down payment.

    I have a tip for you. Stop handing out money you don’t have. If you have credit issues to be addressed, you can’t exactly complain if you’re paying someone else’s bills. That’s a choice you’re making.

  6. Most morgage lending companies now have bad credit because they gave morgages to people with bad credit.

    Just start calling the morgage companies. Ask your realtor. He/She should be able to help you.

  7. if you want a good mortgage company i would recommend wells fargo. I brought my house about 6 months ago and let me tell you they are the best and are very helpful.

    if you are really interested, please allow email, and I can give you the information or just go to the site wellsfargo.com they will help you.

    1 note to make clear, you must have the income, *job wise at least a good income, with you and the person you intend on buying the house with.

    I am going to be straight up, closing costs will be close to 4,000 dollars, and you will be able to get alot of good information from that site.

    I highly recommend wells fargo. they are awesome and did right by me.

    thanks

  8. You can try but I'm telling you from experience that no one is going to trust you with a 100000.00 loan if you have BAD credit and I'm taking it that its bad because you have it written in uppercase letters. You need to do some work and get your credit as good as possible because with the way the market is now lenders are more strict, and FHA requires you not to have one (not one) late payment on your credit for 12 consecutive months before they will finance. Trust me you cant get a bad credit mortgage ive tried and you will still get turned down or be approved for an amount that is completely useless( like 50000.00). Work on your credit for about a year(it took me three) and then you may get approved but for now don't count on it, you will just end up disappointed and alot of inquiries on your credit and they stay on for a year and its not much but every inquiry takes a couple points off.

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