Am I stupid…buying a house with bad credit question.?

Deal Score0

I have been living in a house..lease purchase option for two years. I officially have 11000 down due to part of my rent going toward purchase. problem is..i havent been able to increase my credit score. I finally found someone to give me the load but heres the stipulation……
-house appraised for 181000.00
-with my down payment and owners paying closing costs my loan would only be for 153000.00
-9% interest
-adjustable mortgage rate
I searched and searched and that is the only place that will give me a loan with my 550 credit score. I have to buy this month or move.
Am i stupid for agreeing to such high interest and an AMR or would i be stupid for passing up a house that appraised for 181 and only getting loan for 153???

9 Comments
  1. Reply
    Glen J
    February 24, 2011 at 2:37 am

    Are you in Australia? if so we can help with your finance.

    http://www.apofinance.com.au

  2. Reply
    shugacookiebrooke
    February 24, 2011 at 3:12 am

    I would say go for it. Only because in a year you can refinance. That is what we did with our 80/20 loan. I dont know about that adjustable mortgage though, that sounds dangerous. And if all else fails than sell it for what its worth.

  3. Reply
    Kelley
    February 24, 2011 at 3:25 am

    Sounds like a good deal … but I would find a rate that is looked in and not be on a yo-yo when it comes to that part of it.

    But shop around some more and see what you get.

  4. Reply
    zeltar01
    February 24, 2011 at 4:06 am

    The stupidity started when you didn’t pay your bills on time and let your credit rating slip to 550. It continued when you had two years to build your credit back up and you failed to do so.

    Only you know if this is a good deal or not. If you walk, you’re leaving equity on the table. But, if you can’t afford to maintain it, it’s better to walk. You don’t have enough equity to make money from an immediate sale as you’ll have realtor fees. If you could pay your 9% interest for 6 months, you’ll build your credit score and can try refinancing. This assumes you take care of the other credit issues that are affecting your score.

  5. Reply
    Officer Karma
    February 24, 2011 at 5:02 am

    $ 181,000??? Where are you, Uraguay???

  6. Reply
    Judy
    February 24, 2011 at 5:11 am

    The 9% is high but not unreasonable with your credit score. The problem is the ARM. You have to look at how high the interest can go and what that will do to your payment, and figure out if you can afford the higher payments. They could be MUCH higher than your initial payment. It won’t help you any if you buy the house now, then lose it to foreclosure three years from now. Be VERY cautious on taking out an adjustable rate mortgage. Unless you can raise your score substantially, you wouldn’t be able to refinance into a fixed rate, so your payments WILL go up, probably a lot.

    Good luck.

  7. Reply
    GEE-GEE
    February 24, 2011 at 5:42 am

    If you ever want to buy a house you should do it now. You would be losing your down payment plus the owners are willing to pay the closing costs. You also wont have to move. That only can be pretty expensive. And you wont have to change your address for your bills etc.

    9% sounds bad, but trust me, I have been in the mortgage industry for over 15 years, and with your credit score you are lucky to get a loan at all. You can go ahead and refinance it after a year so try to build your credit in the next year. What ever you do, don’t be late on your mortgage. That will just make things worst. The difference between a 9% loan and a 7% loans which most people get will only be like $ 150 a month. Its not bad for someone in your situation.

    Just take it, build your credit, and refinance in a year or so.

  8. Reply
    insureman613
    February 24, 2011 at 6:39 am

    I think that if you look a bit more, you can find a lower rate then 9%. It is nice to get a mortgage for less than the appraised value, but a house is worth what someone is willing to pay for it, and not what the appraiser said.

    I would try the poor credit section of http://www.bestmortgageanswers.info and try to get a better rate.

  9. Reply
    Gary H
    February 24, 2011 at 7:25 am

    Don’t lose hope if you’re looking to buy a home. There are so many different ways to fund a home now, just about anyone with any kind of credit can get into a home, regardless of credit situation.

    Of course, some will cost you more money in the long run, but a home it’s still one of the best investments that you can make, so, in many cases, it’s worth it, especially for the first year of ownership.

    You should shop around, and ask different lenders what kind of programs they have, and if they can help. Try to find a lender that specializes in bad credit mortgages. You can find some bad credit mortgage lenders listed on this page on and off:

    http://www.axalda.info/bad-credit-mortgage.html

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