If you yearn to be a home buyer but have been turned down by mortgage companies in the past … read this post. If you have a good income but haven’t been so great with paying your bills on time or have overextended yourself on credit cards … read this post. If you have a yearning for knowledge and like to learn … read this post.

Today’s post is a little inspiration for aspiring home buyers with bad credit and debt.

Downpayment assistance doesn’t have to be the only ticket to homeownership. A good plan and a steady hand can help to set you on track and get you to the closing table. “It used to be you tried to save three percent to put down on a house,” Diana Glasier, Senior Loan Officer at National City Mortgage, informed me.

During the last five years or more, it has become increasingly popular for home buyers to get downpayment assistance from grants or first-time home buyer programs like AmeriDream and Nehemiah.  Now that those programs are going away, does this squelch homeownership for real estate buyers? Glasier believes it will take some people out of the market, but there are other options.

Glasier serves the Virginia Beach real estate market and its surrounding areas. She informed me that in her local area, there is a program available through the Virginia Development Housing Authority (VHDA) for low- to moderate-income home buyers. It is an FHA loan and it does allow home buyers to have a second mortgage. “It’s a good option for some home buyers, but some loan officers might not offer this loan program because it pays out a lower commission,” Glasier said.

Another option is to actually save money for a downpayment on your house. Glasier recommends consumers make a plan prior to homeownership efforts. “Take the next three months and put one thousand dollars aside,” she tells the clients she consults. “Call me in the next three months and by that time you should have three thousand dollars saved.”

Why does Glasier recommend this savings strategy? “If a home buyer has money vested in their house, it’s much harder for them to walk away,” she said.

If you have experienced credit problems, it’s not an over-the-hill situation. “A consumer with a low credit score - 400 to 500 - can turn around their credit in 6 to 12 months. Even if you feel that consumer credit counseling is your only option, it’s not the worst. You need to know that you won’t be able to get a loan for 12 months because the mortgage company will want to see that you have been paying the loan back,” Glasier said.

Can you become a homeowner after bankruptcy? Glasier assured me if you pay everything in a timely manner after your bankruptcy, within 2.5 to 3 years you can come return to homeownership. In 7 to 10 years, the bankruptcy is removed from your credit. As for repeat offenders, Glasier said once in awhile, she has had people come to her with more than one bankruptcy. If you have extenuating circumstances - a death, a layoff where the industry shuts down in your town - then you’ve got a chance of consideration for a loan approval.

These aren’t pretty and they aren’t picture-perfect situations in real estate, but they are happening and information on the Internet can be scarce. Talk to a loan officer who knows the local loan programs in your market and the national programs being offered.

Don’t despair - just get educated and then take action.

Posted by Rebecca D. Levinson

Tags: bankruptcy, buying a house, Connect2Agent, downpayment assistance, home buyer, loan programs

This entry was posted on Thursday, September 4th, 2008 at 6:00 am and is filed under Buyer Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.