I Am A First Time Home Buyer With Bad Credit Can I Get A Home Loan?

Fist time home buyers with bad credit may wonder if they can get a mortgage. Depending on their credits score, their level of financial stability and the state of the economy, they can. They should not expect to get the same rates that a person with a perfect credit score would, however. They may also want to request a copy of their credit report and see if there are issues that they can resolve to quickly to help improve their credit score.

The Sub Prime Mortgage Market

First time home buyers with bad credit should look in the sub-prime mortgage market. The market, although currently moving extremely slowly still exists. Provided a person can show a good job history and has a credit score of 550 or more, he can probably get a loan. He may have to pay interest rates of 6 to 7 percent.

The higher interest rates that fist time buyers with bad credit must pay represent the fact that an individual represents a higher risk to the bank. Banks, at the present time, a reluctant to take risks and loan money, although the housing conditions are stabilizing. If the housing market drops much further, bankers may be inclined to take risks again.

What Type of Home Should I Get?

First time home buyers with bad credit are certainly not looking to own a mansion or a similar home. They are usually looking at houses in-town or just out in the country that a previous owner has decided to sell. The house may need some repairs, but it is generally not in the area of town with the highest property values. If the home is not too expensive and not in an area prone to flooding or natural disasters, it may help sway the loan officer at the bank into taking the risk on the property. As long as an individual can make timely payments on his mortgage, it can also help rebuild his credit score.

Related posts:

1. How Are Home Mortgage Rates Determined?
2. Are There Different Kinds Of Bad Credit Mortgages?
3. Will Mortgage Rates Fall?
4. What Drives Mortgage Rates?
5. How Do I Find A Bad Credit Mortgage For First Time Home Buyers?