Anonymous
Anonymous asked in Business & FinanceRenting & Real Estate · 10 years ago

How can we get a home loan with bad credit and no DP?

My fiance and I have been looking for a house for a couple years. We have always done it under my name because I have good credit but I lost my job 2 days before closing on our dream house and a week later someone else was moving in. I haven't been able to find another job because of the economy and I live in a town of only 1500 ppl. There are literally NO jobs in this town and nothing in the towns around us either. My fiance is perfectly fine with me not getting a job because we can afford for me not to but he has horrible credit. He left home at 17 so he's had money problems ever since. He has 1 credit card that he hasn't paid for and he had a truck reposesed 2 years ago. Sooooo he has like a 520 credit score which is bad enough that I don't see how anyone will give him a loan. The house that we almost got we had the loan through USDA and now we're afraid that because of that they won't want to work with us again. Like 3 years ago my fiance tried getting a loan through them and they told him he would have to pay off his credit cards before they could help him. He has paid off one of them but then his truck got reposesed as well so we don't know if he'll just say no way again. Are there any other places we could try that requires no down payment as well? If I had a job we would have no problem getting at least 5% but with me not being able to find a job we can only afford our have to's with not enough to spare to amount to anything. Also we're getting married in September and we'd like to find something before we get married so we can start fresh with a new house and a new marriage. We found another house that we love and it's $65,000 (like i said we live in a small iowa town and $65000 is a NICE 4 bedroom 3 bathroom home lol) I was approved for $120,000 through USDA with no downpayment and I made half of what my fiance does so do you think that will make a difference? If we're financially able to afford the house does that count for something? Also we REALLY want to build a house but I don't even know how to get a loan for that. We have went through absolutely every detail of the expenses to build a house and with my fiance's family willing to build it for us everything since we dont have labor costs around $80,000. Including land, curtains, lights, furniture, sinks, tubs, faucets, everything. Sooo also if someone could tell me how to get a loan to build a house that would be awesome. Please help! We hate our rental!!!

Update:

My fiance doesn't have spending problems he just had to grow up alot faster then most ppl and it took him a while to figure it out and it was a $300 gas card and he hasn't gotten a bill in over 2 years and the truck he lost his job because he was in the hospital and couldn't get another one for 3 months so he couldnt make the payments those 3 months and the bank wouldn't work with him so they did that thing where they sell it and just forget about the difference but it still looks bad on him. But anyway thats not what I was asking i'm marrying him no matter what i love him and his credit isnt going to make me love him any less thats ridiculous.

Update 2:

I obviously know we need to get his bills paid we're working on that i'm just asking where we can get a loan i dont want opinions about how i should save money i don't have and pay bills i cant afford if that was my question i would have asked that.

Update 3:

well doctor deth you have obviously never been to iowa. lol my fiance's entire family built there own homes and 2 of my sisters are doing so right now and yes everyone of them has done it under $100,000. In Southern Iowa the average NICE home cost about $50 to $60 grand and to build one IF your doing all your own labor it only costs a little bit more. I've done my research.

10 Answers

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  • 10 years ago
    Best Answer

    Hello,

    What you're looking for is a construction loan which is much more difficult to get than a regular home loan. Consider that building a home from the ground up has many more factors than labor and what I would call cosmetic fixtures - there are building codes, building permits, inspections for this, inspections for that - it's very involved and at the end more money than many people thought they would need.

    There are programs for down payment assistance and great programs for first time buyers - USDA is one, but most of them would, in my experience put you through a process of paying off debts and cleaning up credit before they give you a loan. There are many things they look at and where low to moderate income might not be a problem, pending debts or job stability may be.

    " Responsible lending" is the new words in the mortgage industry and because of everything in the economy and foreclosure issues . . . they are looking at everything to the letter

    I'm the first to want everyone be a homeowner and advocate housing for all, but all things considered, you may want to get on a path of preparation towards that goal by observing your finances and clearing off debts - ask USDA, they will be more than happy to help you with what you need to qualify again - it may take time, but it will be worth it to be debt free and know your financially stable to purchase a home ( refer to an account who can advice on credit and finances). Also the Housing Finance Agency in your state, may have something for you - ask what you need to qualify or look them up

    Best to you and hope this helps! Mary

    Source(s): CA. Real Estate Broker
  • 10 years ago

    It is great that you want to get a house. But keep it in perspective. First of all, maybe you all should think about moving to a bigger city where you both will have more job options. Second, get all of your debts paid and start saving for a house. Save up for a down payment and still have some extra in the bank before you buy because stuff will come up that you need cash for. Also, your first house does not need to be 4 bed/3 bath. Start with something smaller for the first 10 years and plan on moving up after that.

  • 10 years ago

    With lousy credit and a history of overspending and ignoring his debts, he will not be approved for a loan until he can clean up his act.

    You guys need to get your credit in order. Instead of buying a house, you need to put every extra dime you have into paying off that outstanding credit card and any other debt that you have.

    Your fiance has had at least 3 years warning about his poor credit management - why hasn't he acted to clean it up?

    I recommend that you do NOT marry this man until he can get control of his finances. If you don't, I can just about guarantee that you guys are going to have drop down drag out marriage ending fights over his credit and spending problems.

    ETA: No. You don't get a 520 score by being a responsible debtee. You can sit here and play the victim all you want, but the reality is that he's done nothing over the last 3 years to fix his credit and now you guys want something for nothing.

    It sucks that he was in the hospital and had problems stemming from that. If he had been responsible with his money, he would have had 3-6 months of living expenses saved up.

    It sucks that he moved out when he was 17, but that has no relevance to anything, unless he's only 18 now.

    It sucks that he didn't get a credit card bill for 2 years - he knew he had charges on the card and he should have been following up when no bills arrived. Instead, he just thought it was free money?

    It's great that you love him, but the #1 cause of fights in couples is money. Fights lead to divorce.

    Honey, you are going to inherit his crappy credit and both of you are going to be sitting on your couch wondering why no one will give you money. The answer is because you two seem to have a million excuses and not a clue about money.

  • 4 years ago

    Depends just how "poor" your credit is... If you can get 10% or more down you have a decent chance of someone approving you out there. However you will be paying high rates no matter what. You wont want to hear this because its the honest answer, but you should work on your credit or get 20% down then you will be alot better situtation..

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  • 10 years ago

    If your fiance has a good job it shouldn't be too hard to save up $65,000 over a period of several years. Then you won't need a loan at all, and it's a great feeling to be able to buy a house for cash.

  • Anonymous
    10 years ago

    until he can get his debts and finances in order - you will pretty much have to apply for any loans based on just YOUR income, debts and credit score

    even with a zero down mortgage - which I find hard to believe even exists any more - you will still need a few $1000 for inspections, appraisal and closing costs

    and I seriously doubt you would be able to buy a brand new house with no down payment

    and I also find it very hard to believe you could buy land, get water and sewer hookups or drill a well and septic system and then build a 3-4 BR house for only $80,000 anywhere in the US- that's about 40% of the price of an avg new home in the USA

    I own 2 homes in NE Penna that I paid less than $23,000 each for, in a depressed area, but if I wanted to tear them down to the foundation and rebuild them new, it would probably cost me $150,000+ each - I have them both insured for replacement costs of $150,000+ and they are only 1100 sq ft houses

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    10 years ago

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  • 10 years ago

    Why would you need Double Penetration for a home loan?

  • 10 years ago

    ask a loan officer

  • Anonymous
    3 years ago

    I was interested in the answer too

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