How do first time home owner's loans work?
My fiance' and I are looking to buy a place. Problem is, we both have bad credit. We are not sure if we can get someone to co-sign for us. Now, this place is a Condo property, not a home and is only $30,000. Is there a way to pay, say 33.3% ($10,000) down and not have a co-signer? I am not sure how any of this works. Neither one of us have ever done this before. PLEASE HELP!!!
In all honesty, if your credit is too bad, getting a loan worth having (one that won't cost you more in the long run) is going to be quite difficult. Sub-prime lending is one of the main reasons for the housing industries current destruction, so lenders worth a darn have become more aware of only providing loans for those who are a very low risk, and able to pay back the loan.
I would suggest checking with your local city programs; they sometimes can offer assistance with first time property acquisitions. But be careful, most of these have clauses that will take part (a %) of your equity should you ever sell the property.
Make sure you have a reliable REALTOR (a Realtor is different from a real estate agent, in that they are sworn to higher degree of ethics) who will have your fiduciary well-being as their first priority.
Get an inspection of the property before committing to anything, at $33K for even a condo, I have my reservations on quality. Check the association rules for the condo, and make certain you understand the conditions for ownership.
Above all other things, make sure you can afford the monthly payments. Know exactly what you can afford to pay, and no matter what ANYONE tries to tell you, do not go over this amount. Many first time home buyers make this mistake, and it has cost them dearly in credit rating as well as the devastation of foreclosure. Sometimes it better to wait just a little bit until you are prepared to buy a home on all fronts. Having a few points higher credit rating (can be accomplished in a matter of months) can save you thousands of dollars in fees and interest over the life of your loan.
I hope things work out for you, and that you find the home of your dreams at a cost you can truly afford!
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