That depends on how bad your credit is.
There are many degrees of bad credit, and many people fear that their credit is “bad” because they missed 2 car payments in a row 9 months ago, or because they have a collection account or several derogatory items in their recent credit history. And they may well be right, depending on exactly how late, and how long ago these things happened. But there are many factors that determine an individuals credit score. Having many “good” tradelines or accounts may compensate for the few “bad” or derogatory ones. In any event, it is wise to check your credit often to see what exactly your score looks like.
Now, to address the question directly, if you have “bad” credit, you may still be eligible for a mortgage. The FHA insured loans are usually the best option for those with imperfect scores, but you’d better be able to fully document your income, demonstrate the ability to repay by having a low debt to income ratio, and you may also need other compensating factors such as “reserves' (assets retained after closing) or a larger than minimum down payment.
FHA will allow for a buyer to obtain the down payment from many sources such as a gift. They will also allow for a co-signer to help lower the risk on the loan to the lender. The co-signer does not have to occupy the property, and if it is a family member, maximum financing may be available.
If your credit is truly too “bad” to qualify, don’t give up.
Fix it! Credit scores are based primarily on the preceding 2 year history of an individual. Payoff high balances to less than ½ of the limit, get current on installement and revolving debt, and correct any errors. If you are not sure how to proceed, consult your loan officer or a reputable credit counseling agency.
This is becoming the question of our time. There are a couple options you would have. You can find a hard money lender in your area. A hard money lender is a group of private investors that pull money together and find loans that no one else wants to do. If you are looking for a home loan, here are a few things to know before you go looking…
They are not going to loan on a house that has less than 30% equity in it
They are going to want to see all your income and assets
Be prepared to pay huge rates and fees.
The typical loan will cost you anywhere from 8-11% in upfront fees. So plan on it costing you about $100 for every $1000 borrowed. Also the rate will be sky high, somewhere in the range of 12%-18%.
The best thing to do if your credit is not in great shape is to call someone to help you fix it. It is not only the cheaper way to go but it will also help you lower your costs on your current bills too. It only takes about 30-45 days to complete and the results will blow you away. Once you complete the program you can walk into your bank and get whatever you want. You will also be able to renegotiate your current credit cards and auto loans to help lower your payment. I hope this helps you.