Buying a Home Question

**leeleeaub** · 02-14-2006, 04:51 PM

Does anyone know if you can buy a home with bad credit? Or if it is even a smart idea? We are paying 1,004 a month for our townhouse and that is cheap for this area. I feel sure there has to be a cheaper payment for a house in the country where I love to be anyway.

**SewCrafty** · 02-14-2006, 05:50 PM

I don't know about the bad credit question Lee, might be a good one for the bank manager.

Check this post out and scroll down to where I answered, good link there to find a home close by you.

Good luck!

**homesteadmamma** · 02-14-2006, 06:08 PM

Personally I don't think anyone should purchase a home if they have bad credit. I think they need to work at getting a good credit rating BEFORE they make a leap into ownership. Home ownership costs money - there is mortgage, taxes, upkeep and all the expenses that go along with it. I'd also call the bank manager to see what they say in regards to this.

Is there anyway you can find a home for rent or even rent to own in the country, rather than trying to purchase a home right now.

**homesteadmamma** · 02-14-2006, 06:09 PM

Dee you forgot the link.

**FrugalMomof3** · 02-14-2006, 06:26 PM

leeleeaub,

Let me just say that I HAD bad credit when I thought about buying a home, I of course paid all my overdue balances and was able to get a loan BUT I got one through the VA (Veteran Affairs).

Most often they will approve you if they see you are re-establishing yourself, but I agree with the previous post about waiting to buy a home if you have bad credit, meaning if you have past due bills, get them out of the way first, wait some time for the balances to be changed on your credit report then contact your creditors to see if they can work with you about changing comments or negative marks on your credit report (believe me this works). OR you can get your credit report and dispute items saying they were paid in full, etc.... (I did it this way too).

You'll be starting fresh with no collectors calling or sending those letters, it's a great feeling.

~Tracy~

**Pepper** · 02-14-2006, 08:01 PM

I agree with CJ, if you have bad credit, it is unwise, IMO, to purchase a house. You should really weigh the pros and cons of renting vs owning.

**SHOPGIRL** · 02-14-2006, 08:50 PM

It all depends on how bad your credit is. If you don't have control over your finances, then it's a bad idea to take on a mortgage. On the other hand, if you had a bad year, had late fees, etc...but your back on track, you just happen to have a bad FICO score, then you might want to check into getting a mortgage. You should be able to qualify for a loan even with bad credit. Just know that you'll be a higher interest rate. It's a good idea to establish a friendly relationship with the bank manager. Sometimes, they can help you get a better rate than a rate you qualify for. A lot also depends on your income and how much outstanding debt you have. Remember, negative credit marks have a statute of limilations. The average length nationwide is 7 years so it all depends on what state you live in. So, depending on how old your negative marks are can make a huge difference.

The most important thing is that you are establishing good credit again. Without knowing the specifics of your finances, I'd say, go ahead, and look into buying a house. I wish I would have bought a house a whole lot sooner. It's the best investment I ever made.

If you haven't seen your credit report, you can get one each year for free. Take it in and discuss it with your banker. See if you can get pre-qualified for a loan. If not, the banker can tell you what you need to do.

Don't assume that you can't get a house just because you think you have bad credit.

**SewCrafty** · 02-15-2006, 07:47 AM

Sorry Lee, here you go: does anyone know of someone who is selling a small homestead near houston?

**PrairieRose** · 02-15-2006, 11:20 AM

I think it depends on several things. 1 being do you owe others from the past and haven't been able to pay? (these are rhetorical questions...I'm not asking you to answer them) 2 Are you up to date on all your bills now? 3 Do you have money saved up for a down payment? I think it would be wise to look for something cheaper to rent, work on getting back on your feet in all areas and then looking into buying something. With home ownership comes all the repairs, etc. and sometimes that can be a lot. When we bought this house (we bought it from my parents, I knew the house very well having lived in it most of my life) within 2 years every appliance died.

We thought we'd starve keeping it up those 2 years. Now it's been over 20 and we are holding our breath hoping it doesn't happen again...

**leeleeaub** · 02-16-2006, 10:52 AM

Ok, I will explain. My husband didn't have a job for a while and his vehicle got repossed because of this. I was working but it wasn't enough to make the payment and pay the other bills. Now I am just thinking that the 1,004 that is going to rent would be better spent on a house payment and might be cheaper. My credit is bad from hospital bills not a lot of them but enough to make my credit bad and I don't think that I could get a house in my name not having a job and being disabled. I really don't know what to do. Thanks for all the help and the link.

**MOMMYDEAREST** · 02-16-2006, 11:04 AM

yes you can...but the interest rate will be a little higher. thats what happened to us. the normal interest rate was like 8.0% and we got locked in at 10.5%. i hope i helped out