Buying A home in NJ with Bad Credit

Buying a home with bad credit in NJSo you want to buy a home, but you have bad credit, what you can do


Just because you have bad, poor or no  credit, filed bankruptcy or gone through a foreclosure or divorce,  does not mean you cannot buy a home. You most certainly can buy a home with bad credit. But you’re going to pay more than a borrower who has sparkling credit and its going to take some time to finf the right lender to counsel you and help you clean up your credit.

  • The period between bankruptcy filings is seven years, but the ding to your credit report stays for 10 years.
  • For better rates with a conforming loan, the wait is four years after filing bankruptcy.
  • FHA guidelines are two years after a foreclosure, which means you could qualify for as little as 3.5% down.
  • Hard-money lenders will often make loans six months after filing bankruptcy or a foreclosure, but will a require 20 to 35% down payment. The interest rate will be very high and the loan terms are not as favorable; many will contain prepayment penalties and be adjustable.
  • Subprime lenders (not to be confused with hard-money lenders) are no longer making 100% financed loans.

How to Improve Your Qualification For a Conforming Loan

  • Obtain a major credit card. It’s easier to get than you would think after a bankruptcy, for three reasons:
  1. A bankruptcy filing gives you a “fresh start.”
  2. The lender knows you have no debt.
  3. You can’t file bankruptcy again for another 7 years.
  • Show steady employment on the job for one to two years.
  • Earn a regular salary or wage (this does not apply to self-employment).
  • Save a down payment of at least 10%.
  • Avoid late payments and continue to pay your bills on time; do not fall behind.

For more information about buying a home with bad credit call me at 973-846-0065 and I can point you in the right direction!

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