If you really want to buy a home but your credit score is holding you back, there’s good news: you may be able to buy a home in Port Aransas with bad credit.

The Bottom Line on Credit

This isn’t financial advice—we’re not financial advisers. However, you may be relieved to find out that even if you’ve had a bankruptcy or foreclosure, you may not be automatically disqualified from buying a home in Port Aransas.

How is Buying a Home With Bad Credit Different From Buying With Good Credit?

You can buy a home with bad credit, but you’ll most likely pay more than a borrower who has a high credit score will.
Lenders are in business to make money, and they can’t do that without assuming a certain amount of risk. While some buyers need to do major work on their credit reports in order to qualify for great rates, the truth is that many buyers who think they won’t qualify for a mortgage actually will.

After a Foreclosure or Bankruptcy: What You Need to Know

If you’ve had a foreclosure or a bankruptcy, here’s what you need to know:

• A bankruptcy can stay on your credit report for up to a decade.
• You’re more likely to get better rates and more favorable terms if you wait about four years after filing for bankruptcy before applying for a mortgage.
• FHA guidelines only require that you wait two years after a foreclosure, and with an FHA loan, you could put as little as 3.5 percent down on a home.
• FHA guidelines only require that you wait three years after a short sale.

Are You Buying a Home in Port Aransas?

If you’re looking for a home in the beautiful city of Port Aransas, we’d love to help you.
Call us at 361-563-7788 or get in touch with us online to tell us what you want from your next home. We’ll begin searching right away.
While you’re here, check out our:

• All-in-one mortgage calculator
• Free homebuyer handbook
• Free eBooks about buying a home (and more!)

You can also check out:

• Port Aransas Homes
• Port Aransas Condos for Sale
• Port Aransas Lots
• North Padre Island Homes
• North Padre Island Condos
• North Padre Island Lots

Filed under: Blog, Buying by Julie Woodward
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DISCLAIMER: This is not intended to replace financial advice; we’re not financial advisers. If you need financial advice, you should speak with a licensed financial adviser.
Can you buy a house with bad credit?
Let’s talk about what constitutes “bad credit” for the purposes of buying a home so you know exactly what you need to do if you’re ready to make the leap.

Buying a Home With “Bad Credit”

Typically when lenders refer to someone with bad credit, they could mean that the person has excessively high credit card debt, late payments, a bankruptcy, or a foreclosure.
The most obvious ways to improve your credit are to pay down your debt and make timely payments. As for bankruptcy and foreclosure, time is typically the cure.
What you can do is talk to a lender that specializes in helping borrowers with bad credit. Your lender can point you toward special programs that will improve your credit and show you how you can finance a home, even with a bankruptcy or foreclosure on your record.

Time Frames for Foreclosure and Bankruptcy on Your Credit Report

Before you assume that you have bad credit, order your free credit report from Annual Credit Report. Thanks to the Federal Trade Commission, everyone’s entitled to one free copy of his or her credit report every year.
A bankruptcy can stay on your credit report for up to 10 years. The farther the bankruptcy is in your past, the more favorably lenders may look at your credit profile.
If you’re using a conforming loan, you typically need to wait about 4 years after a bankruptcy or a short sale.
If you’re using an FHA loan, you must wait 2 years after foreclosure. The good news? After 2 years, you may qualify to pay as little as 3.5 percent down. If you’ve had a short sale, you’ll have to wait 3 years.

Are You Buying a Home With Bad Credit in Port Aransas?

If you’re buying a home in Port Aransas, call us at 361-563-7788 right away. Tell us what you’re looking for and we’ll help you find it.
In the meantime, browse our Port A real estate listings in some of the most popular communities:

Filed under: Blog, Buying, Consumer Tips, Credit Scoring by Julie Woodward
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If you lost your Corpus Christi home due to foreclosure, you probably haven’t given up on the dream of owning a new home. The good news is that a number of guidelines have changed which may allow  you an opportunity to buy that new home sooner than you think.  

There are a few guidelines that lenders follow to determine when you’ll qualify for financing after foreclosure. Arming yourself with this information may help you qualify again for a mortgage.

Foreclosure With Extenuating Circumstances

Generally, lenders will take into consideration any extenuating circumstances surrounding the foreclosure on your Texas real estate.

Was there a death or illness that prevented you from earning money to pay your mortgage? Did you have a job transfer that came with a steep pay cut? Were you severely injured and temporarily disabled as a result?

You can add a memo that explains any lapses in credit worthiness to potential lenders. This report can be as long or as short as needed.

Many lenders will shorten the waiting period for documented extenuating circumstances. Traditionally the waiting period after a foreclosure is seven years. However, these waiting period guidelines may change and you would be best served by getting up to date information from a qualified mortgage professional.

Deed-in-Lieu of Foreclosure and Short Sale

You may be wondering what the waiting period for financing is if you have exercised a deed-in-lieu of foreclosure or successfully negotiated a short sale. Fortunately many lenders offer options if you were able to avoid an actual foreclosure.

Traditionally the waiting period for a deed-in-lieu of foreclosure can be four to seven years. If there were special circumstances surrounding the deal, you might be able to qualify in as little as two years. The lender may have certain down payment or credit score requirements as a condition of approval.

Getting financing after a short sale generally has the shortest waiting time before qualifying for a new home loan. Generally the lender will only require a two-year waiting period before they’ll approve financing. Once again, a call to a licensed mortgage professional will give you the most up-to-date information.

The good news about financing after foreclosure is that it is possible. Your dreams of owning a home can be fulfilled even if  you have experienced a foreclosure in your past.

Filed under: Personal Finance by Julie Woodward
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The process of buying a foreclosed home is slightly different from the process of buying a non-foreclosure home.  If you want to invest in Port Aransas foreclosures, therefore, it is important to understand the different ways by which to purchase a foreclosed home.

There are three main ways to buy a foreclosed home.

Buying before the auction
Some delinquent homeowners may want to sell their homes before facing an actual foreclosure.In this instance, the homeowner, in agreement with the lender, agrees to sell the home for less than the amount owed on the mortgage.This is called a short sale. Short sales are “pre-foreclosures”, of sorts. By broadening your home search to include short sales, you can identify homes that may be sold at a discount.

Buying at the auction
Another way by which you can invest in foreclosure homes is by buying the home at auction. From area to area, the legal requirements for the sale of a foreclosed home at auction may differ. If you plan to buy at auction, you’ll want to be familiar with your area’s customary judicial proceedings.

Buying after the auction
Buying after the auction means buying bank-owned properties. This can be the most lucrative and safest means of investing foreclosure properties. This is because lenders often reduce the sales prices of their home inventory in order to “sell it quickly”. It can be expensive for banks to own foreclosed homes, and few banks are equipped for managing owned homes. Check with your local real estate agent to see what, if any, bank-owned homes are available for sale in your area.

The process of buying a distressed home is different from the process of buying a “traditional” one. Therefore, regardless of which path you follow to buy a foreclosed property, have an experienced real estate professional on your team.

Filed under: Personal Finance by Julie Woodward
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Foreclosure-tracker RealtyTrac reports falling foreclosure sales nationwide as banks get better at selling homes via short sale.

In its Q3 2012 report, RealtyTrac says that 193,059 homes in some stage of foreclosure were sold, accounting for 19% of all residential home sales. In addition, pre-foreclosure sales — also known as “short sales” — climbed 22% on a year-over-year basis.

For the first time since 2007, the number of short sales outnumbered the number of homes sold in foreclosure over three consecutive quarters.

The average price of a short sale home fell by 5 percent as compared to a year ago which may reflect an eagerness on the part of mortgage lenders to dispose of distressed properties before they fall into foreclosure. Foreclosures can increase a lender’s losses, and foreclosed properties be expensive to manage.

Compare the average Q3 2012 sale price of a home in short sale versus one in foreclosure :

• Average sale price of a residential property in short sale : $191,025
• Average sale price of a residential property in foreclosure : $161,954

It’s not just the higher home sale prices that have pushing banks to settle on short sales, either. Short sales are less costly, too. Foreclosing on a home requires banks to pay court costs, among other fees, and which positions the short sale outcome as a clear winner for many banks. 

For homebuyers in TX , the banking industry’s shift toward short sales is welcome news.

Buying a short sale has been a notoriously slow process with a lack of defined timeline. As banks improve their distressed sales division, they’re getting faster and more efficient. This makes it “easier” for a buyer to buy a home in short sale.

However, don’t buy a short sale without the help of an experienced, licensed real estate professional.

The negotiation process is different for a short sale than with a “traditional” home purchase. Time lines are different, responsibilities are different, and purchase contract language may be different, too. The same is true for buying a foreclosure.

Filed under: Housing Analysis by Julie Woodward
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Foreclosure activity continues to slow throughout the United States.

According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings dipped below 215,000 in September 2011, a 6 percent decrease from August.

A “foreclosure filing” is defined as any foreclosure-related action including Notice of Default, Scheduled Auction, or Bank Repossession.

September marks the 12th straight month in which foreclosure filings fell year-over-year.

There are several reasons why foreclosure filings are down, including an increase in the amount of time it takes banks to move a foreclosure through its pipeline. It now takes a nationwide average of 336 days from the date of initial default notice to bank repossession.

Some states work quicker than others, however, because of a combination of state law and personnel.

Homes in New York take an average of 986 days to foreclose, for example, the longest in the country. Homes in Texas foreclose the quickest, registering just 86 days.

As in prior months, bank repossessions remain concentrated by state. Just 6 states accounted for half of the country’s REO last month:

• California : 16.6 percent
• Georgia : 8.5 percent
• Florida : 8.3 percent
• Texas : 6.2 percent
• Michigan : 6.1 percent
• Illinois : 5.2 percent

Collectively, these 6 states represent just 36 percent of the nation’s population.

By contrast, the bottom 6 states were home to just 192 repossessions last month — 0.3% of the national total. Those 6 states were Alaska, Wyoming, District of Columbia, North Dakota, South Dakota, and Vermont.

For home buyers in Corpus Christi , shopping for foreclosed properties can be an excellent way to get “a deal”. Foreclosed homes typically sell at discounts as compared to “non-foreclosed” homes, but are often sold “as-is”. This means that homes listed for sale may be defective or out-of-code.

Before placing a bid on a foreclosed home, make sure that you’re represented by an experienced real estate professional. 

Filed under: Housing Analysis by Julie Woodward
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