No. We have programs for less than perfect credit, and also offer our “Credit Repair & Improvement Program” for extremely damaged credit. We have been fixing credit for over 20 years, so we even if you think your credit is horrible we can help. We have helped many families improve their scores by more than 200 points. Our Credit Repair Coaches will create a step by step plan for your credit that will take all the guesswork out of what is affecting your credit and how to fix it. More importantly what to focus on and what is a waste of time. So, we will walk you through each step of the process and educate you on credit and how it works. Learn How to Get Started with our Credit Repair Program.
Your monthly income versus your current monthly debt or payments will determine how much income you will have left over to purchase a home. Most programs will generally have a rule of 43% to 50% of your monthly income can be used for your home, auto, and other reported debt.
There are a variety of different programs that assist with down payment and closing costs. So, one of these programs can be used in conjunction with a loan to achieve a small to zero down payment. Many programs are offered by local city programs, county programs, state programs, tribal programs, and a number of others. We currently have six (6) different programs.
Lease / Purchase homes can be very similar to owner financed homes. A lease purchase is typically a short term lease, 6 months to 1 year, that will automatically convert into a purchase. So, you are actually purchasing the home with a short term lease on the front end. A lease agreement is created with a purchase agreement at the same time, so purchase price and terms are negotiated at the same time as the lease. These are usually designed for families that are working on their credit or other items to get approved for a mortgage and want to hold the house. Most of these programs require a mortgage lender give the owner or investor an analysis of the buyer’s credit and approval status.
Your income and debt will determine how much home you can buy. All home buying programs are going to look at your ability to pay. That means how much you are currently paying for rent or housing, and then your other debt. Other debt is any payments that show up on your credit report, or are being made from your bank account on a monthly basis. Your total income versus your total debt will give you your “Debt to Income Ratio” or “DTI”. This shows the lenders or programs how much of your income is spent on other debt, and how much is left over for a house payment.
Bank statements show your spending habits. Your tax returns, W-2s, and paystubs show your monthly income, but your bank statements show how much of your income is left each month. In many cases, people spend more than they make and your bank statements will show that. Your bank statements will show your other expenses like meals, entertainment, and other purchases. Your bank statements may also show other payments that are being made that are not showing on your credit report.
Closing costs are buyer costs for their loan or mortgage. This includes lender processing and/or origination fees. This also includes amounts for taxes and insurance on the home. The first year of home insurance is required for all purchases. In addition to the first year, a lender will require an additional 3 months of insurance for an escrow account. They will also require 3 to 10 months of property taxes to be collected for an escrow account.
There are also other costs like title insurance, a survey, and other costs. Closing costs range from 3% to 5% of the purchase price, depending on the type of loan program you are getting.
Not necessarily. Most standard down payments for FHA loans is 3.5% of the sales price, while Conventional programs can range between 0% Down to 5%. Certain areas of town are eligible for $0 Down Payment programs through the USDA or certain special loan programs. Then there is number of Down Payment Assistance Programs (DPA’s) that can be used to achieve a small to 0% Down
There are different options, depending on what kind of loan program you are getting to purchase your home. Most conventional loans require that all of the money or funds for a home purchase come from the buyer. Down payment and other closing costs must be verified in an account for a minimum of 60 days. So, the buyer has to have the money for 60 days or more to be able to use it for the purchase. Most conventional programs do not allow gifts or other borrowed money.
Some conventional programs have bond programs or DPA programs for both down payment and/or closing cost assistance.
With most government programs like FHA loans, you can get your down payment and/or closing costs gifted by a family member. So, that means that a family member or several family members could help you pay for your down payment.
Owner financed homes are offered by owners or investors on an alternative financing program. With many of these, the owners will create their own loan qualifications and credit requirements. So, this means that owner finance programs can vary from one house to another. Many are usually easier to qualify, but come with a higher down payment requirement and higher interest rates. These programs allow for more people to own a home, versus renting. There are even private lenders who offer “Owner Finance Programs”, which can be applied to any house. Find out more about our Owner Finance Programs and How We Can Help
Credit scores and credit history are the first thing a lender or alternative program will look at. They want to see your paying habits, collections, and major credit items like Tax Liens and Judgments. Tax liens and judgments will be required to released or removed prior to any approval. Even owner financed and lease/purchase homes will check your credit for these items, because they will attach themselves to the title or ownership of the home.
The second item is income, job stability, and debt, so any lender will ask for your tax returns, W-2s or 1099s, and recent paystubs. All home buying programs are looking for a two year job history and two year average income. With these two items, stability is key. They want to see that you have stayed in the same job or job type and are making a stable income. Let us help you get qualified Today.
Job and income stability are typically more important than credit. A lender wants a minimum of two (2) years at a job or position to consider it stable income that does not fluctuate. On many occasions, a lender may use this stability to compensate for a lack of credit history or some minor credit blemishes. This stability becomes a compensating factor to convince the lender that you are a good risk. So, changing jobs and especially job types is a sign of instability for any lender or home buying program.
No. It is not required, but could come in handy. Your credit score, history, and amount of established credit will determine if rental history is required. If you are lacking credit or have a limited amount of credit history, then a good rental history will be required. If there are some credit blemishes, then a good rental history may be used as a compensating factor and make up for some credit problems.
Closing costs are buyer expenses, but can be paid by the seller of the home through a “Seller Contribution”. So, knowing your closing costs in advance and a good real estate agent are important for this part of the transaction. As part of your initial contract negotiation, you will want to negotiate for the portion of closing costs that you think you might need.
FHA loans will allow 6% of the sales price to be contributed by the seller. And, most conventional programs will allow 3% of the sales price to be contributed by the seller through the sales contract.
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