How To Get House Loan In Us With Low Income/Bad Credit

[Guest low income_bad credi]

My parents are thinking of buying a house in United States and the house is on sale for $400k.

They are paying 25% down payment but due to once my dad went to India and forgot to pay his credit card bill which was less than $300, his loan is not getting approved. Any suggestion which is the best bank to go in this case and any Govt. Plans for loans in this kind of situation?

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Thanks

[Wales85]

The simple answer to this is to pull your credit report. go to https://www.annualcreditreport.com/cra/index.jsp. If that all looks gravy, I suggest your father call bank that he applied for the loan at... and ask to see if the underwriter could explain why the loan was denied. You will not get to speak to the underwriter directly, but it may be that the customer service men working at the bank can contact him/her and figure it out.

Not paying the $300 CC is absolutely not what is causing his loan to not be approved. If there is a problem that is on your credit report, and assuming it is not legitimate, you should contact all 3 credit report agencies and get it removed.

-W

[Guest low income_badcredit]

Thank you for your advice.

which 3 companies exactly?

I am not in US therefore I cannot access this website.

[Guest Ambarsaria]

Some things required:

1. Steady income. Typically income should be three times more than approx. home payment. If on salary then they will look at your most currents w-2s. If self-employed then you need to show past two years tax return. No exception.

2. As wales mentioned, one need to be aware of their credit history. Typical credit score required to buy home is approx. high 600's. Above 700 is excellent. Mine was in high 600's when I bought house couple of yrs ago. One must have good credit history; means couple of credit cards with less debt ratio. If your credit cards are full, which will pull your credit score down. More hard enquires on your credit will also pull your score down.

3. Above 20% down payment is good and now considers as minimum down payment by mortgage lenders. Paying above 20% down payment will also save you couple of hundred $ per month from PMI (premium mortgage insurance).

Bankers are very tough and they don't have enough money to lend, so they pick the best candidate. Your best chance can be FHA loan (govt backed) and they require only 4 to 5 percent down payment but needs flowing income, good credit score.

Also, credit score sheet mst be with your dad as broker should give the report, required by law.. (depends on states)