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Sunday, June 24, 2012

Can FHA Help Me Buy a House As a First Time Home Buyer With Bad Credit?



Can FHA help you purchase your first home with bad credit? That would depend on what bad credit means to you. FHA has their guidelines. Easier than conventional mortgage, perhaps a little more costly, but it could be your answer to purchasing a home.
Below are some guidelines that FHA will look at prior to giving a mortgage approval.
  • 2 lines of credit will be needed on your credit report. If this not possible, they do have supplemental forms that can be filled out.
  • Chapter 13 Bankruptcy: It's possible after a year of payments. You must have the courts trustee approve it, must be able to afford it, and have a steady income and job.
  • Chapter 7 Bankruptcy: Two years after the bankruptcy was discharged you could be eligible. A full explanation of the bankruptcy, established new lines of credit, and have a steady source of income with a steady job.
  • Late payments: If you have had a few mishaps with paying your credit cards on time, don't worry. They will look at your full credit history and payments. A few misses here or there shouldn't hurt you to much.
  • Federal loans, and taxes: You cannot be deliquent on your loans or owe back taxes. This will dis-qualify you.
  • Judgements will have to be paid prior to closing on a FHA mortgage.
  • Foreclosure: If it's been 3 years since a foreclosure, they you can apply. Certain circumstance may apply. Need to of established new lines of credit. Speak with your FHA advisor for more details.
If you haven't established credit already or established new lines of credit, you will want to. Even if you start with a secured line, it is the first steps. Be responsible with the credit, pay on time, do not max them out, and use it wisely.
How much of a down payment will you need? At the very least 3.5%. As of right now, you can have some of the closing cost financed and some of it can be gifted. There is talk about changing these guidelines, down payments and closing cost. Keep up to date with what's going on.
The home buying process can be intimidating for first time home buyers are for someone with past credit issues. FHA will is the easiest way to home ownership, for people with past credit issues. Speak with your Realtor, and your FHA consultant for more information.
Visit Lisa Savino's site for more ideas on selling your home in today's market. If you are thinking of selling or buying and would like more information please feel free to contact me at lisa.savino@randrealty.com We service Westchester, Putnam and Dutchess County NY. Are you out of state and would like a referral for a reputable realtor please contact me subject line referral needed and I will be more than happy to send you one of our top referral agents for the state that your in.


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