First Time Home Buyers? Loans with Bad Credit are possible.
Being a first time home buyer is stressful enough. If you have bad or very bad credit, instead of the dream of a new home, many people look at the process of securing a home loan for people with bad credit as a nightmare.
Is it even possible to buy your first home with bad credit?
That's a good question. The short, and honest, answer is that it depends. It depends on your current employment situation (Are you working full or part time?), your earning stability (do you earn a fixed amount every month or does your monthly take home pay fluctuate?), your level of income (do you make enough to cover both the home loan and all of your other financial obligations?), and your current (not necessarily past) credit situation.
If you are confident that you meet all of the above requirements, you'll probably have a fighters chance of being approved for a first time home buyer loan, even if you have poor or bad credit. The big question then becomes, what kind of interest rate will you be looking at? The worse your credit is, the higher your interest rate will be, and the more you will have to pay every month for your loan.
A down payment can be very helpful when it comes to home loans for first time home buyers with bad credit. In general, the more money you can put down, the better the chance you will have of being approved and the lower your interest rate will be. This is especially true for those people with a bad past credit history. If the lenders see you're willing to put up a large stake upfront, they'll be more likely to do the same. In general, a down payment of 20% will get the lenders to show some love.