Wells Fargo has now announced that they will give FHA loans to credit borrowers with as low as a 500 credit score. You will need as much as 10% down, but there are HUD homes that qualify for FHA in the area as low as $38,000 - and let's face it, $3,800 for a downpayment is easy enough to come up with, especially around tax time.
Of course this news has received praise and criticism. Some people are excited that they may "have another chance". Others think we're just setting ourselves up for another wave of foreclosures down the road - and that could be true, especially if people buy at the high end of their price limit.
Yet what I don't see mentioned is how this really isn't going to help a massive amount of people buy a home. If you have a credit score in the 500's, there is usually a reason. Foreclosure? You're still going to be stuck with the "three year rule", where you can't qualify for an FHA loan for three years after the foreclosure. Bills in collections? Not going to happen. High debt to income ratio? Still not going to qualify. So depending on your circumstance, it is hard to say if this change will help you or not.
If you are interested in buying a home, the first thing you need to do is to talk to a lender to see if you are ready to buy, and if not, a good lender can help you figure out what you need to do to get to that point.
If you have any questions about the home buying process, feel free to contact Joslyn Solomon @ 612-850-3153 anytime, or e-mail Joslyn@JoslynSells.com. You can also catch me on facebook! http://www.facebook.com/joslynsolomon