Six Steps to buying a Florida home with Bad Credit


Six Steps to buying a Florida home with Bad Credit

Do you have a low credit score but want to take advantage of the mortgage mess to buy a Florida home? If you are like millions of Floridians others trying to keep up with credit card bills, car payments and a student loan on a reduced, or non-existent income, you may think that a new loan is out of reach. In truth, Florida bad credit  loans are more difficult to obtain these days, but you may be surprised that there are still ways to get a Florida bad Credit  home loan with bad credit.

Getting a Bad Credit Florida Mortgage with bad credit isn’t as easy as it was a year or two ago. However, it isn’t as impossible as some news reports make it seem. Even Floridians with bad credit reports which reveal past financial sins still sometimes get to the promised land of mortgage approval. Most Florida Home Buyers and Refinance clients do so with the help of a skilled and experienced Florida mortgage lender who specializes in Florida bad credit home mortgages.

Florida home buyers should know the many advantages of the FHA mortgage loan programs. FHA loans were created to help increase home ownership. For the Florida home buyer the FHA program can simplify the purchase of a home, making financing easier and less expensive than a conventional mortgage loan product. Some highlights of the Florida FHA loan program include:

Minimal Down Payment and Closing costs.

Down payment less than 3.5% of Sales Price Gifts are allowed Seller can credit up to 6% of sales price towards closing and prepaid costs. 100% Financing available No reserves required. FHA regulated closing costs.

Easier Credit Qualifying Guidelines such as:

  No minimum FICO score or credit score requirements. FHA will allow a home purchase 2 year after a Bankruptcy. FHA will allow a home purchase 3 years after a Foreclosure.

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Why Now?
Now could be your best chance ever to own a Florida home. There is a lot of inventory on the market, about 12 months’ worth of Florida homes on the market as of June 2009, so there is a wide selection of Florida homes, townhomes, condos, ect to choose among, especially if you are flexible about where you are willing to live. And Florida homes have depreciated across the board an average of 23 percent since 2005, so there are lots of Florida home bargains. Add to that relatively low interest rates, and you have a perfect storm of opportunity-if you can get a bad credit Florida home  loan.

You can’t get a Bad Credit Florida home loan if you don’t apply. But where should you look if your credit is not good? Read on for six steps to get a Florida bad credit mortgage loan, even if you have bad credit.

1. Get in the Game
First, consider an FHA backed loan. FHA loans are designed for Florida home seekers with less than stellar credit, and the interest rates are usually less expensive than rates on sub-prime loans, sometimes up to three percentage points less.  Reach out to providing Florida bad credit mortgages with No Min FICO Requirement.

2. Look for Help from Experts in Florida Bad Credit Mortgage Loans
While you are online, use one or more comparison shopping sites for Florida bad credit mortgage lenders. Typically, you enter your information just once for access by multiple Bad Credit mortgage lenders. Since these Florida  lenders are focused on bad credit loans, they know the ins and outs of qualifying with low FICO scores and which Florida lenders will accept which kinds of credit problems.

3. Improve your Odds by Forgoing Jumbo Loans
If you have bad credit, conventional Florida mortgage lenders won’t touch you with a ten-foot pole unless you have a huge down payment. Then you can get a loan of up to $417,000 and it can be underwritten electronically rather quickly. Otherwise, stay within Florida FHA loan limits for your area. That means a fairly modest home is your best bet if you have a low down payment and some credit issues. Jumbo financing IS out there–but it’s very hard to get– you have to prove you can afford the higher payments, a Florida bad credit lender that specializes in jumbo loans charges much higher rates.

4. Understand New versus Existing Florida Home Prices and Sales
There are two kinds of Florida homes on the market: existing and new. Traditionally, the percentage of sales is about the same for both while the supply of existing homes is larger. That may not be true in some areas. Florida, for example, is offering a $10,000 tax break to those who buy newly-constructed homes. In distressed markets, deal-seekers may have to decide between negotiating with a struggling developer or a bank entertaining a short sale. The Florida short sale might be a better price but these transactions often take months and fall through. If the developer is still the legal owner of the property, new construction might be a faster way to go.

5. Understand the Appraisal
Appraisals are independent evaluations of the value of the Florida property. If an appraisal comes in lower than your offer, you can still go forward with your purchase–but you are in an excellent position to negotiate a lower price. If you are getting an FHA loan, your purchase contract explicitly states that you cannot be forced to complete a transaction if the home appraises for less than the sales price. If your appraisal comes in higher than the sales price, you still get to buy at the lower price if you have a valid contract and have obtained financing.

6. Understand Interest Rates and Timing
Florida Bad credit mortgage loans are going to cost a few points more than loans for people with solid credit, so interest rates are especially important to those with poor credit. Although interest rates are relatively low right now, they are fluid, which means that they could go up enough to undermine your loan. One good thing about today’s soft real estate market is that, rather than asking for a price reduction from the Florida home owner, you can ask for them to pay enough points to buy your Florida bad credit loan rate down to something manageable. It shouldn’t matter to the seller if they drop the price 5% or pay 5% to get you a good interest rate. They’ll still receive the same proceeds.

Remember, you can’t win if you don’t play, so forget about rejection and start by filling out some bad credit mortgage loan applications.

Apply for a Florida Bad Credit Mortgage

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