Thinking of buying first home, but I have bad credit and no down payment?

I keep going back and forth:

- I could wait a year and improve my credit and save for a down payment. I would continue paying more in rent than I would in mortgage and insurance, but I would have more money in savings and better credit, therefore a lower interest rate,

-Or I can get something now at a higher rate of interest, and pay less than I do now in rent, and split the savings into paying down the principle and paying off bills.

What do you think?

Update:

This houses I am considering are about $35,000 - about what I make a year in salary. With no down payment and 8% interest, my payments would be about $350 for mortgage and insurance - $200 less a month than my current rent.

11 Answers

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  • Anonymous
    1 decade ago
    Best Answer

    good credit is the beginning

  • 4 years ago

    Some cities sell homes they have taken over for very little money (sometimes as low as $1.00) but you have to prove your income, and agree to live in the property for at least a year. Most of the neighborhoods are in dangerous areas, and most of these homes need work, so you would have to procure funds for that. Really, if you can't get a downpayment together the conventional way, you should not buy now. Home ownership is a very expensive proposition. How will you pay for a repair, if, for example, the heating system or some other large system breaks down? Better off clearing your credit and saving money for a downpayment. Good luck!

  • Anonymous
    1 decade ago

    Wait a year and save your money. You will benefit in the long run by improving your credit score to get a better interest rate and lower down payment.

  • 1 decade ago

    With todays market, It might just be best to get your creit together first. And after doing that with a house at such a low price you can probably finance your down payment into your loan. Because with your credit messed up you think the price is only $35,000 but at your rate it will be much more. Is this a trailor home if so you have to make sure that the loan company finance. They all don't finance trailor homes.

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  • 1 decade ago

    Unless you're buying a house that is in much worse shape than your apartment your mortgage and insurance will be much higher than your rent.

    In the current environment you're not going to be able to get a mortgage with bad credit and no down payment.

  • 1 decade ago

    Bad credit is one of the worst problems to have... however there exists a solution.

    I will hereby talk from my personal experience.

    I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details,

    if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

    a good place to start in my humble opinion is a straight to the point ebook with question and answer I found :

    http://umgarticles.atspace.com/debt-consolidation....

    if it helps kindly remember me in your voting!.. cheers!

  • robert
    Lv 4
    1 decade ago

    Get your credit in better shape and save for a down payment.

  • 1 decade ago

    I think you should just wait on your dream house due to the fact that you have bad credit. Just get all the bad things out the way and soon or later there wouldn't be any things you have to wait on you can just buy what you want without worrying about your credit or any bad things you think would happen. I think its the best thing to do is wait.

    Source(s): Helping out.....
  • 1 decade ago

    Take advantage of the benefits of owning your own home. There's nothing better than owning a piece of property. Everybody's situation and reasoning are different. There's great First-Time homebuyers programs out there with replicable companies.

  • Anonymous
    1 decade ago

    With no down payment and bad credit maybe you should just continue thinking and dreaming.

  • 1 decade ago

    Jeez! That is one low cost home! Where do you live? That is super affordable, just get your credit in shape. If you can prove that you have steady job history, constantly making $35k a year, that will realyl work in your favor, too.

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