I decided to write this article today after closing a home purchase loan for a couple that had some major credit issues. They got into house with ZERO down payment, and only had to bring $600 for closing costs. Their situation was pretty bad, I’m talking about a bankruptcy 2 years ago, thousands of dollars in outstanding collections, charge-offs and debt to income ratio of 49%. By way, we left all of their outstanding charge-offs and collections open which means they didn’t have to pay any of them off! So many think they won't be able to qualify for a mortgage loan. Many will keep thinking they can't qualify until they read this article.
My name is Nick Graziano and I have been employed as a Loan Officer for 5 years. I have experience originating conventional mortgage loans as well as sub-prime (non-conventional) residential mortgage loans. Many of clients that I deal with have great credit (and know it) and have no problem getting a loan but then there are those with credit problems (and they know it too). The ones with great credit are ones that are easy to close, get best rates and all with minimal time involved on part of myself.
But, this article is for those with credit problems, low income and those who cannot afford a down payment. I am going to show you how to qualify for a loan with ZERO down payment, and only out of pocket expense will be less than $1,000 ( if any at all) to cover some of closing costs. This is just an example of one particular loan program that I use but there are numerous others out there. I picked this loan program because it allows 100% financing down to a 575 credit score
I see it on a daily basis.
Everyone wants to own a home and those with credit problems are calling every mortgage company in phone book and applying on every mortgage website out there. (And there are many out there). Only to find out later that every time a mortgage company pulls their credit, their credit score dropped a few points, or that particular lender doesn’t originate type of loan that you need. That is frustrating.
Step by Step
Here is where I show you how to qualify yourself for a zero down loan.
1.The first thing you need is your tri-merge credit score. I would be more that happy to suggest a few places on internet that you could go to get your credit score but I don’t want this article to seem like an advertisement. So, best thing to do is to do a search on yahoo.com for terms like “free credit reports”, or “tri-merge credit report”. Just make sure that you end up pulling a “tri-merge” credit report on yourself. A tri-merged credit report pulls your credit profiles from 3 major credit reporting companies and merges it into 1 report. The nice thing about pulling your credit yourself is that it will NOT affect your credit score. Bookmark this page while you go get a copy of your credit report and then come back to see additional steps.
2.What is your credit score? Most mortgage lenders will use middle of three scores. Example: Your credit scores are 576, 525, 599. In this case you would use 576 credit score since it is not lowest score and it is not highest.
3.Is your middle credit score at least 575? If so, congratulations and move on to next step. If your middle score is less than 575 you have some homework to do. You can either sign up with a credit repair company (“search yahoo.com for credit repair”) to try and remove some derogatory items on your credit which will raise your credit score OR you can try to acquire some credit to help re-establish your credit worthiness. The easiest way to re-establish your credit is by either getting a car loan or credit card designed to help re-establish your credit. Again search yahoo.com for “credit cards to re-establish credit”