Buying a house for the first time or upgrading from an existing house is a big decision. It's important that you have a good understanding of what you can and cannot afford to buy.
Contingencies
If you already own a house and have decided to move but don't yet have your first house sold, there is the option of putting a contingency offer on the second house. This means that the second house is being held while you get your first house sold.
Keep in mind that contingency contracts usually only hold the house for a limited amount of time, and in some cases, you can get bumped if another buyer shows up with a better offer, meaning no contingency, more cash, better credit. Although this is an option, it should be carefully considered.
If you have great credit or have cash to put down, you can usually make an offer without a contingency. However, if you need to sell your first house before you have the money to close a deal on a second house, then you have a real dilemma.
Often sellers are uncomfortable working with contingencies in that they want more certainty. To come to a compromise, sellers might accept the contingency contract as long as it has a "kick-out" clause. This clause states that if a better offer comes through, the seller has the right to accept the new offer, thus canceling your offer.
It is a far better solution to sell your first house before you put a contract on a second house. Going this route will end up saving you effort, disappointment, and money.
If you are uncertain about your financial situation, meet with a financial advisor or mortgage lender before signing a contract.
Bankruptcy and Divorce
Unfortunately, this is the situation of many people. Many divorced people end up filing for bankruptcy due to the financial issues involved. What are the options for someone in this situation where they have a good income, but need a loan for zero down loan because their savings has been depleted?
There are viable options allowing qualified borrowers to finance the entire purchase of a house, including closing costs. These options allow a buyer to purchase a house with no down payment. The catch is that credit history needs to be spotless and with a bankruptcy, there could be problems qualifying. One thing to remember is that if you have filed bankruptcy, after two years have passed since its dismissal and you've maintained good credit since, you could qualify.
However, you should really look at your current situation and determine if this is the right time for you to buy. If you have just gone through a divorce, more than likely your bank account has been drained. Lenders prefer that you take time to rebuild your savings and get your feet back on the ground. Obviously, from their viewpoint, they don't want to put you in a situation of defaulting on a loan because you weren't ready.
One of the factors taken into consideration for a mortgage loan is the credit score. If you aren't sure what your credit score is, contact the three leading credit-reporting agencies and request a copy of your report plus your score. Scores in excess of 700 are considered the best. Scores over 680 are also good but if you fall below 630, the lenders view it as you having potential trouble qualifying.
If your credit score is not quite up to par, you should wait a little while before pursuing a house. Take the next year or two getting all your credit in order, bills paid off, and money socked away in the bank. Although it's tough waiting, it also provides you with a goal, which in the end will eliminate a lot of unnecessary stress.
Once that has been accomplished, you should consider a Federal Housing Administration (FHA) loan, which requires only 3% down. In addition, their underwriting guidelines are less stringent than other types of loans.
The best thing you can do to prepare is create a budget and stick with it. Once you see a plan written down on paper, you will be able to track your progress much easier. Make sure to speak with a mortgage broker to find out from them what you can or cannot afford. With lower interest rates you may be surprised at the amount of a loan you may be able to afford.
If you can't buy your house right away, don't be discouraged. It's far better to be thoroughly prepared so when you do close, you will be able to enjoy your house and feel much better about your decision.
For Buyers 
