Most South Floridians do not bother with the home buying processes because they believe their history of Bad Credit and lack of a down payment does not help them stand a chance of ever becoming homeowners. The lending standards and credit viability may not be as easy in this case, but they are not impossible to achieve as well. If you would like to become a homeowner despite your bad credit history, there are simple procedures you can apply that will get you back to your journey towards homeownership.
A mortgage lender needs to be convinced that you are capable of paying for the Loan once they grant it for your homebuying. You can convince them by getting all of your documents together, from income and financial status, stocks and bond investments, existing liabilities to recent tax returns and bank statements. Since the home owning process is not easy, you can also use the same documents to find out whether you are in a good position to finance a mortgage loan without running into bad debt again. The lender is also able to gain some level of trust on your capability to afford a mortgage despite the history of bad debt you may have or no downpayment to deposit.
A Federal Housing Administration (FHA) loan is a good option if you have a history of bad credit. The downpayment is really low compared with a conventional loan and is insured by the federal government. This type of loan does not have strict guidelines when compared with Federal National Mortgage Association (FNMA) or also known as Fannie Mae, and Federal Home Loan Mortgage Corporation (FHLMC) or popularly known as Freddie Mac, and allows for borrowers with foreclosure records and bad history to apply. This means despite the bad debt recorded on your credit, the government has provided options that can allow you to become a homeowner at the very least with a downpayment or between 3 to 3.5%. This is so much better than paying 20% of the mortgage amount firsthand.
Another process that can help improve your chances of getting a loan approved is getting a cosigner. A cosigner can earn trust with the lender and also assist in negotiating fair interest terms for you. Since the credit will appear on both of your credit documents, a cosigner will only be confident to sign on your behalf if they are sure you will not default on your payment. If you default, they are liable for the payment of balances recorded, making it quite a challenge getting one to sign on your behalf.
The post Bad Credit and No Downpayment Is No Reason to Not Become a Homeowner appeared first on Florida Condo hoapm Blog.
