Oh no, I m not joking! You read it right. A bad credit, bankruptcy or foreclosure cannot stop you from owning a house. Gone are the days when only the “solvent” could afford to buy a house. Nowadays, even a person with no credit can dream of owning a house. Of course it comes with a little more price, but something is better than nothing, right?
When can you actually start seeking a loan?
1.There are certain rules which you need to follow after your bankruptcy to be able to seek a loan. These are:-
2.The period between two bankruptcy filings is seven years but the credit report demands at least ten years.
3.FHA Guidelines list a period of two years after foreclosure to be able to qualify a down payment of just 3-4%.
4.You can get a loan even after six months of filing your bankruptcy but you have to approach hard money lenders for that. However, they demand a down payment of 20-35% and the interest rates are also very high.
Advantage of down payment:
If you want to save lot of money, down payment is a very good option. Often, bank lenders are satisfied if you can give them a major part as down payment and they will not deny you a home, even if you have bad credit to your name. A down payment of up to 20% on the home will mean that you need not make heavy interest payments, thus saving you a lot of money.
Improving your qualification for a loan:
It is not that you cannot buy a house with no credit check. After all, you can always make an effort to improve your credit ranking. This can be done in the following ways:-
a) Obtain any major credit card as it lends positive outlook to your credit report. This could be a “Discover card” or a “Visa and Master card”.
The former is very easy to obtain as you need to have an annual income of just $15,000 or better still, a college student as they have no minimum requirement. Some other questions are asked and if you qualify, you get the card in a matter of few days.
The Visa and Master cards are issued by many individual banks. They require you to have a savings account and a debit card on that account. If not, you need to get a “secured credit card”.
b) Show that you have been steadily employed in a job for one or two years and that you earn a regular salary. Self employed people do not come under this category.
c) Accumulate a down payment of at least 10% to up your credit ranking in the books of the bank. Also make sure you make the payments on time and do not lag behind.
People who are still not qualified to buy a house with no money down can approach various creditors online. They offer special mortgages for people who carry poor credit in their name. They will give you credit loans even within six months of your filing bankruptcy but they will charge you very high rates of interest, which will make you think that bank financing would have been the best option for you.
So if you were wondering how to buy a house with no money down and bad credit worry no more coz it is definitely possible. Now it depends on your preferences and current circumstances as to which option you decide to choose for yourself- bank lenders or online credit lenders.