Buying a house, with a huge down payment, but very little credit, advice needed?

Question

I am interested in a house for $62,000, it's been on the market for 3 months without a reduction, so I could potentially get it cheaper (they bought it for $41,000 6 months ago). I have enough to put a $45,000 down payment down on it (I actually have a little more, but that is all I'm comfortable putting down), which is like a 75% downpayment. In my opinion that is pretty good, but I don't know if it's enough to make a bank take me seriously.

Here's the problem:
I have very little credit, but it's all good credit. Right now I am a stay at home mom, and my boyfriend is the one working. We've lived together for 5 years, but we're not married, and he is not interested in getting married. He has BAD credit racked up from years before he met me.  

Is there any way to make this work so I can get this house? Is the down payment enough to encourage the bank that we're serious, and if we fail to make a payment, they can take the home? That would sound like enough collateral to me.

Help! What should I do? Any advice?

Bella · Accepted Answer

If someone  bought it for $41K just 6 months ago, I doubt it's worth more now unless they've made substantial improvements. This may have been a flip, which is something you do not want.  Flips tend generally tend to be properties that have cheap, superficial improvements that won't stand the test of time.  You could be buying a money pit.  Aside from that, if you still want the home. I would say any bank will take a 75% deposit on a home seriously, even if you do have bad credit.  You can buy a home without a co-signer if there are income incentive programs in your state.

chatsplas · Answer

Strangely enough, the problem is the loan would be too small
Try going to a local bank and explaining the situation and asking if they can work with you
Unlikely to get anywhere with the larger bank chains

Housing prices are NOT rising that quickly in 5 months. . . .and may NOT appraise out, and bank will refuse to help you buy at $62000. . . . .try them with a cash offer of $45000
this must be a flipper. . . .did they put money into the house in decoration, kitchen, bath?  if they put nothing in, they may be willing to take less. . .but they will probably want a bit more

To get a mortgage, banks want job stability;  preferably 2 years on job, will accept 8 months if his current job is in the same industry and he has been in the industry for 3 years. . . .but if his credit is so bad, that's a problem. . . . .Mortgage approval is the whole package of you:  job stability, sufficient down payment, adequate income, good credit, low debt ratio.............................credit rating is a reflection of your financial management or mismanagement, and if he's been paying off his delinquencies, paying down his credit cards, etc.  his credit rating should be rising

Another option is a seller mortgage. . . .but be SURE you have an attorney representing you if you go this way--last option.  Make sure you get title in your names, and seller just gets a lien.

Anonymous · Answer

Buy it for cash at $45k as it has not gone up in price in 6 months unless they have spent $20k on it in improvements! Also get the deed in your name only and make sure he signs a waiver of interest in the property if all the money is yours.

Slickterp · Answer

If they bought it for $41K 6 months ago, it's highly unlikely it's worth $62K.  

Offer them $45K cash.  Hard to resist.

Don't let you bf on the title if that is all your money.

Anonymous · Answer

DO NOT, UNDER ANY CISCUMSTANCES, PUT YOUR BOYFRIEND IN TITLE OF PROPERTY

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Buying a house, with a huge down payment, but very little credit, advice needed?

5 Answers