Posted on: 06th Aug, 2009 05:17 pm
This is my situation. My husband and I are both 18 and we have an 8 month old daughter. We graduated this year and both have part-time jobs (my husband is trying very hard to get on full-time where he works) but we are a very low income family. We currently are living with my parents, but have been here the past year and I feel like we're being pushed out the door. We recently found a home that had been foreclosed on and was only $49,900, which even we would have been able to afford. The problem is we weren't able to get a loan because we have no pre-existing credit. We've been advised to build up our credit over the course of the next year by taking out small loans and paying back on credit cards, however, we won't have any place to live until then. The cheapest apartment in this area is $500/month for a 1 bed 1 bath 500 sq feet apartment, but there's a 2 year waiting period. My question is... is there any home loan available for young couples just starting out who haven't established any credit, yet?
Try FHA or see if some once help you by co-signign the loan
Hi Kimberly,
I can understand that you are in a tough situation. With no pre-existing credit, it would be impossible for you to get a loan. Keeping in mind the present market situation, lenders have become very skeptical in giving loans to people with poor or no credit score. As your lender has said, you need to build your credit first and then look out for loans. I don't think there are any kind of loans available for couples with no pre-existing credit.
Thanks
I can understand that you are in a tough situation. With no pre-existing credit, it would be impossible for you to get a loan. Keeping in mind the present market situation, lenders have become very skeptical in giving loans to people with poor or no credit score. As your lender has said, you need to build your credit first and then look out for loans. I don't think there are any kind of loans available for couples with no pre-existing credit.
Thanks
Yes, there are banks that will work with "insufficient credit". However, you must make up for that with other compensating factors such as income and down payment.
That being said, you are both 18 and only have part time jobs. It is highly unlikely that given that scenario, you would be approved for a loan.
My suggestion is to find a cheap place to rent, save some money, and build your credit. Then, if you are still together when you are 23...buy a home.
That being said, you are both 18 and only have part time jobs. It is highly unlikely that given that scenario, you would be approved for a loan.
My suggestion is to find a cheap place to rent, save some money, and build your credit. Then, if you are still together when you are 23...buy a home.
kimberly, as eric has noted, you'll need to work on your credit standing, job history, etc. for a while before lenders will give you a chance at a mortgage.
you mentioned that there's a waiting list for these apartments. are you restricted to that one location? can't you shop in an adjacent town, for instance? moving out isn't going to be stress-free no matter how you slice it, but it probably wouldn't get any worse if you moved 5-10 or more miles away if it gave you the opportunity to get a decent rental.
as for building your credit, keep in mind that when you do move, you'll be paying rent. your landlord will be a very valuable reference, so don't get into any contests with that person, don't pay late, and be good tenants. you'll need full time employment for a lender to consider you seriously - maybe that next town will have something viable. not only full-time, but you're going to need a history of the job before you will be able to get a mortgage. not only that, but you'll want to stay on the same job for a good period of time, preferably 2 years, before you think about applying for a mortgage.
if you go get some credit in the form of credit cards, be very careful how you use them. only use them minimally and then make sure you pay each bill on time, without fail.
here's another thing you can do that might not sound like much, but it can definitely help. stay active on this website and read some of the threads so you can see what has happened to others and try to avoid some pitfalls. you'll also see some good advice on how to advance yourselves.
i give you both credit for having married and graduated while trying to care for an infant. don't let this situation discourage you, but keep working on your lives together, your credit and try to stash away a few extra dollars wherever you can.
you mentioned that there's a waiting list for these apartments. are you restricted to that one location? can't you shop in an adjacent town, for instance? moving out isn't going to be stress-free no matter how you slice it, but it probably wouldn't get any worse if you moved 5-10 or more miles away if it gave you the opportunity to get a decent rental.
as for building your credit, keep in mind that when you do move, you'll be paying rent. your landlord will be a very valuable reference, so don't get into any contests with that person, don't pay late, and be good tenants. you'll need full time employment for a lender to consider you seriously - maybe that next town will have something viable. not only full-time, but you're going to need a history of the job before you will be able to get a mortgage. not only that, but you'll want to stay on the same job for a good period of time, preferably 2 years, before you think about applying for a mortgage.
if you go get some credit in the form of credit cards, be very careful how you use them. only use them minimally and then make sure you pay each bill on time, without fail.
here's another thing you can do that might not sound like much, but it can definitely help. stay active on this website and read some of the threads so you can see what has happened to others and try to avoid some pitfalls. you'll also see some good advice on how to advance yourselves.
i give you both credit for having married and graduated while trying to care for an infant. don't let this situation discourage you, but keep working on your lives together, your credit and try to stash away a few extra dollars wherever you can.
It would also help if you could be added to a credit card account with a huge balance as a user. If you have a parent or family member who has good credit and a card with a lot of available credit, they can add you to the account and you will see your credit scores rise rapidly. This will allow you to establish more valuable credit lines. If you use this credit wisely and do not abuse it you will find yourself in a position to but a home much quicker.
Also, a co-signer on a FHA loan would be an option.
Also, a co-signer on a FHA loan would be an option.
i don't know about that "credit card account with a huge balance" idea, moresouth...also, the credit agencies are supposedly no longer giving credit for authorized user accounts.
Sorry...that was a typo. I meant to say available balance...of course adding more debt to your credit wouldn't help.
Just four months ago, I suggested this to a client that was looking to establish credit. Not only were they able to raise their credit scores, they have been able to obtain credit lines that they previously weren't "qualified" to recieve.
In the past, this technique has also helped countless others I have helped build credit for.
You are also correct when you state that credit agencies supposedly no longer give crdieit. but often this slips through the cracks.
Just four months ago, I suggested this to a client that was looking to establish credit. Not only were they able to raise their credit scores, they have been able to obtain credit lines that they previously weren't "qualified" to recieve.
In the past, this technique has also helped countless others I have helped build credit for.
You are also correct when you state that credit agencies supposedly no longer give crdieit. but often this slips through the cracks.
thanks for the clarification...i scratched my head raw trying to comprehend the "huge balance" statement. now i get it!