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Is there any way on God's green earth for a poor family with awful or no credit buy a junky old house? Seriously. We're that family and owning a home is about all I want in this world. Can anyone give me any real tips that could help?
Seller or private financing - clearly you need to work on establishing and maintaining a budget.
Understand that homeownership is more than the monthly payments. There will be trip to the hardware store, calls to service providers, updates and upgrades...budget at leat an additional $300 a month for *things* that pop up.
For example, my thermostat just quit. My neighbors gutters have a huge hole - water pours through...water heaters need replaced, dishwashers fail, cauling needs to be replaced......plan for it, and it will be okay.
Perhaps you could also look into a lease option (aka, rent-to-own) property. Just be sure to read all documents before signing and do your due diligence if you decide to go this route. Good luck!
Rent / Lease with option to buy... be very careful to understand EXACTLY what the option says.
Seller Carry Back... find someone that owns a home outright and is willing to sell on time.
Buy a lot and start with a Mobile Home... can be a very low cost option
Someone you know gives you a home outright or in a will.
Don't give up... I bought my first home with my brother... we were both in school and the place was about to be condemned... we worked out a deal with the owner and had about 10 days to "Clean" the place up enough to avoid condemnation.
Many here can advise you of some "loopholes" that are perfectly legal within the credit reporting system of repairing credit.
However, let's first consider if you can truly afford a payment on a house. Lenders will lend up to 50% of your total debt compared to your income. If you're comfortable with it, please tell me the monthly gross (before taxes) income of anyone who will be on the loan. In addition tell me the total monthly debt payments that would show on your credit report (credit cards, student loans, car loans, installment loans, etc..)
From those numbers, I can give you an fair estimate of how much house you can buy once you improve your credit. This will at least give you an idea of owning a home where you live is even possible with great credit. At least in the traditional sense of lending, as there are always government programs out there which can get you into a house for a lower than traditional payment.
As far as the credit loopholes go, legally the 3 bureaus have to investigate a dispute within 30 days. If they don't get proof that your dispute is inaccurate, the item will change in your favor. This can even be used to make items completely disappear. If you're interested in more info on this let me know... or look through some earlier posts I've made on this forum.
Not a stupid question at all. You could do a rent to own, or look for a property that the seller is willing to finance. I think someone mentioned checking out HUDs website. You may also want to check with your county's housing department. In the county I live in, there are programs that teach people in your situation the steps to take to become home owners.
You have been given some very good tips on things to look into. Also, let's define for no credit, maybe you can start to establish some. Get a credit card, charge a little on it, and then make the payments. don't just pay it off, make payments. then pay it off after about 6 months. Talk to a lender and see how much money you do have and what you need to do to fix your credit or establish credit. And work on that as well.
You have been given some very good tips on things to look into. Also, let's define for no credit, maybe you can start to establish some. Get a credit card, charge a little on it, and then make the payments. don't just pay it off, make payments. then pay it off after about 6 months. Talk to a lender and see how much money you do have and what you need to do to fix your credit or establish credit. And work on that as well.
I absolutely cannot agree with that advice, to tell a person with bad credit and low income to make payments on a credit card - with their ridiculous interest rates. That is the trap that low income families fell into that destroyed their credit in the first place.
Lenders aren't the first people to talk to either. Lenders are commissioned salespeople whose goal is to get people to borrow money, to "make a sale", not independant financial advisors working in their clients best interest.
I second those above who mentioned HUD, Habitat for Humanity and local non profits that can look at his/her income and finances and assist in putting together a solid budget and financial plan focussed on a specific goal. What the poster needs is real workable and long lasting advice.
The whole "work-around to get someone into a home" deal of dodgy mortgage lending, credit manipulation and squeezing incomes is what started the whole subprime mess in the first place. Time to go back to good old fashioned saving money, living within means, buying what people can actually afford financial values and common sense.
Tennessee
I looked at some of your past posts, your situation is pretty dire, $640 Social Security, can't afford $1,000 rent, extremely ill and on hospice. I wish you well and hope you find help. I don't think homeownership is on the cards. You need to go to your local town or county to get help with affordable housing. You said you live in California and want to move to Tennessee, Tennessee would be much cheaper to live in though I'm not sure how you will get there. Please go to your local authority for assitance, you need it.
Not stupid at all! From your name I assume you're in TN. Try the state housing authority, as well. Here's the link: Tennessee Housing Development Agency (THDA)
Many of these programs are for lower income families and they'll require you to go through some finance training, develop a budget, stick with it. Are there any major developments being built in your area? In our state, if the development is large enough a percentage of the homes must be identified as affordable housing. A lottery is held to determine, from qualified applicants (get thee credit in order because you must be preapproved by the lender). Call both the towns and counties where these developments are being planned.
Best of Luck!
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