Q&A: Is home ownership possible for people with poor credit?
Question by Tina R: Is home ownership possible for people with poor credit?
I have poor credit, but I have a steady job and planning to enroll in a debt consolidation program. I have never owned a home before. Are there any programs for first-time home buyers with poor credit? Does anyone have any recommendations?
Best answer:
Answer by graciouswolfe
I can only say for a fact, that the worse your credit rating is, the higher the interest rate becomes.
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If your credit score is poor and you are looking to buy your home, you can go for a bad credit home mortgage loan. Poor credit history includes series of late payments, bankruptcy or failure to pay bills. No matter how bad your credit history, with a bad credit home mortgage loan, you can easily borrow money to finance your house. This helps you to buy a home, redecorate your home or consolidate your loans. This type of loan reduces your total monthly payment because of lower interest charges and liabilities. As this loan gets tax relief, your tax liability reduces.
If your credit is bad, your best choice would be to seek the loan and/or advice through a mortgage broker. They deal with people with bad credit and could probably get you the best rate considering they can get you qualified though many different lenders.
I have worked as a mortgage broker for over 5 years. I would say whatever you do, don’t sign up for credit counseling! Most lenders treat is as a BANKRUPTCY. this is not a joke. Credit counseling will kill your credit for years!
Credit consolidation is not really the answer. What ever they do for you , you can do for yourself. All you have to do is call your creditors and have them reduce your interest so that you can make timely payments to them. Credit consolidation put it in your report so it might not help you with the mortgage. Take a look at your report all three of them and get your scores to see what is it that you have to change. I can show you some ways to clean it up.
No.
Why is your credit poor? Do you have a bankruptcy? If it is to much debt, they may help you if you have steady income and can show good payback. There are places that lend to people who are considered a higher risk, you will have to come up with a down payment, depends on your credit and size of the loan, there is also a chance you could consolidate your debt into your home loan, maybe get a home equity loan down the road.