Even with Bad Credit can I get Home Finance?

To purchase a new home remains a distant dream for many Americans, especially people that are marred by bankruptcies and. Such people fear they may never see a home again in their lifetime, and that bankers would generally avoid them like the plague. Nothing could be further from the truth.

The bankruptcy remains marked in your credit report for a period from seven to ten years and the impact of a foreclosure lasts for two to three years. The ground reality is that bankers tend to see you as a bigger risk, but this doesn’t mean that their doors are closed to you forever. What they will insist upon is a bigger down payment from say 20% to 30% of the costs and a higher interest rate. If you are in a position to raise this amount or bear the higher costs you can proceed with the loan formalities.

When you are faced with such a situation and harsher demands like this there are some ground rules you can modify:

The nature of the home and its location and size are very important. You have to decide whether an apartment, townhouse or country house suits you. The size of the home depends on the size of your family and the number of adults. As the size increases the electricity and water and other utility expenses will increase proportionately. You may have to settle for a smaller home and compromise on comforts as the urgency is to strike roots as fast as possible and bring stability into your life.

A real estate agency will help you scour the local listings and show you properties that fit your budget. Choosing the home may appear to be easier but the difficult part is only just coming up-it’s your down payment. The realtor will help calculate the exact down payment and he may also tie you up with a home financier with an affordable interest rate that does not strain your resources.

At this stage you need to get your documents and papers ready for verification. The financier will insist on records proving the fact that you are enjoying steady employment for at least two years and that you are drawing a regular salary income. This is a very important requirement particularly because your credit history is compromised. Further, you have to show that you are paying all your bills in time without default.

At this point you have two options, either you sell off some assets and raise the margin money or you approach a banker for a personal loan that will assist you in meeting the down payment. On both the fronts you may run into problems. On the assets front you may be severely disadvantaged because of the bankruptcy or foreclosure history, and the banker may not be forthcoming with personal loans once he review your bad credit background.

Perhaps one solution would be seller financing. Here the seller who owns the home outright without the burden of a mortgage to pay off, can himself take on the role of a financier and loan you the home on his own terms. Just as with a banker you execute a mortgage deed with interest rate and tenure of payment clearly mentioned. The benefit of this arrangement is that you may get the seller to agree to a lower down payment and more favorable terms and close the deal quickly if the seller is convinced you are a good client.

Using the vehicle title loan intelligently can help you buy your new home

The car equity loan, based on the collateral of your vehicle, helps unlock the equity in your vehicle to the extent of 60% to 70% of its commercial value. The cash loan for title delivers the money very quickly with minimum formalities, and charges an interest rate not exceeding 25% APR. The loan for vehicle title has a flexible repayment program and the borrower gets to repay the principal in equal monthly installments spread out over an extended period. The loan can be used to contribute to the down payment that you need for closing the home buy.

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