Can I Be a First Home Buyer if I Have Bad Credit?
Yes, as a First Home Buyer but it depends on what’s making your credit bad. If you have collection accounts, late payments filed for bankruptcy or even had a foreclosure you can still buy a home. You just need to meet the requirements for those things.
How Can My First Home Buyers be Saved?
If you’ve been a victim of a foreclosure, a lien holder shut off your home due to unpaid taxes or you had an indictment on you for a tax offense you can still buy a home using a 20% down payment. The phrase “need to meet the requirements” may provide some relief in regards to the foreclosure record keeping requirements so you can still buy a house while avoiding the foreclosure spiking of properties or buying in property owner executed foreclosure.
Now that the foreclosure dust has settled on the coronavirus, the number of purchases you’ll be able to make has tapered down to a much more manageable level — but shouldn’t. It’s still very much a buyer’s market so take advantage of this by being a great house buyer and you could be one of the lucky ones who gets ahead.
Before diving into the market here are some huge factors to consider.
Historically Higher Mortgage Rates
Compared to historical rates of 3-4%, mortgage rates were already much higher when the coronavirus took place. Historically, mortgage rates have been fairly stable at 3-4% for most of the last 100 years.
Wow. The game is certainly different now that mortgage rates are hovering in the 3-4% range.
After speaking with multiple mortgage professionals, it is becoming apparent that many buyers may have doubts about whether they will be able to obtain a mortgage without having enough cash on hand. Maybe several months down the road perhaps you wouldn’t want to attempt purchasing a new home at these raising rates of interest — especially if you already have an investment property.
If you have a limit in mind and you try and get a loan to buy more, the bank may not approve it. If the bank knows you have that limit and try to sell you a loan to buy more, the bank could reject the loan and you’d lose the deal.
Another factor that determines how much you can get on a loan is what provinces you live in and what the interest rates are on your mortgages. Now I already said you could get a mortgage, but you would most likely be paying the investor’s mortgage interest rate if it’s the cheaper rate. For this reason it’s important to know what rate you can pay if you need to pay an off-market rate.
Risk in Buying Real Estate
Another factor that comes into play when you are a frist home buyer is credit risk. Credit is not a 100% guarantee, and there are individuals that are just not good at handling credit well. It’s not fair, but some people are just unorganized and don’t do well with money.
Many people are not good at handling money and start to drink, gamble, do drugs, etc. Good credit is not the super power everyone thinks it is. Credit can be used against you, but the other factors outweigh that. It’s about the numbers.
I’ve always said I’d rather buy in America, especially if the people there treat their money like dirt. So how do you build up your credit like you want to?
I hope today’s post helps you.