How should somebody with bad or mediocre credit begin to secure financing for a mortgage on a first home?
Written By: aaren on December 11, 2009
3 Comments
I know there are first time homebuyer programs and what not, but haven’t the slightest thought where to start. If it helps i’m in the state of Illinois and have a relatively low income at the present time.
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Tags: first time homebuyer programs, present time, slightest idea, state of illinois, time homebuyer programs
"just be yourself"
If you have terrible credit, then you are a "subprime" candidate. If you haven’t been paying attention, the whole mortgage mess in the US right now is because too many banks were lending too much money to "subprimes". So you might have a lot of distress getting any money right now, even at high interest rates.
Your best bet is to improve your credit rating so that in a year or two you won’t be subprime. Make sure all your debts are in excellent standing. Pay back arrears. Make at least the minimum payment every month. Order a copy of your credit report, and fix any errors on it (everyone’s report has at least 1 error, and they can cause problems).
Your realtor should be able to answer a few of your questions. First thing to do is get in contact with a lender, your agent should be able to help with this.
The lender can direct you into which program will help you the most. He or she should discuss with you what you need to do ie: making sure your credit stays where it is or gets better, income. If the lender says you can’t get a loan or into a program look for another lender, there are tons of programs and loans for first time home buyers.
My huge advice would be to educate yourself and stay away from sub-prime loans. But that’s just my 2 cents.