Is there a way to get a mortgage with bad credit?

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I am 21 and from the time I was 18 until I realized what I was doing I had credit cards and other small loans and one defaulted bank account on my credit. Due to a wreck, I now have alot og dr. bills on my credit because i have not settled yet with the person who ran into me. I make payments on my defaulted items and make a good amount of income now. I am ready to buy a house…. Is there a way?

3 Comments
  1. Reply
    tryinthis2
    April 30, 2011 at 11:24 pm

    every time you make a payment the seven years to fall off begins again. did u get your settlement? go get a loan or a credit card with a high limit and consolidate it all. then dispute the charges on your credit report with all three credit bureaus. get it off there. then go buy a house. it didnt take you overnight to get where you are and it wont be that quick to get it better. be patient and it will work.

  2. Reply
    Credit Guru
    April 30, 2011 at 11:50 pm

    Tryinthis 2 gave you really bad advice.

    Buying a home is driven by three major things, Credit Scores, Debt to Income Ratio, and the property.

    Your credit score is the most important thing because it will determine if you get approved and at what rate.

    Your debt to income ratio will have to be less than 45%(some lenders allow 55%) meaning if you make $ 3,000.00/month your total monthly payments can’t exceed $ 1,350.00, that includes credit cards, car payments, loans and your mortgage PITI(Principal, Interest, Taxes & Insurance)

    You know your income and your other debts so you can calculate how much per month you can afford for a mortgage payment.

    Do you know what’s in you credit report?

    If not go to http://www.annualcreditreport.com and get all 3 for free once per year.

    Do you know your credit score?

    If not go to http://www.myfico.com/12, it will cost you $ 45.00 but you will get your 3 real FICO scores(the ones the lenders use) and you can shop around and see what kind of interest rate you will get.

    For example many sub-prime lenders will lend up to 100% of the value of the home with certain conditions and a credit score as low as 550. Be aware that you will pay a high interest rate and most likely will have a prepayment penalty for 2-3 years.

    Also check out what real estate is doing in your area. Some areas have run up in value too fast and too much and may be due for a correction. You don’t want to be “upside down” in a house. You can’t get out of it as easily as you can a car.

    Good Luck

  3. Reply
    happeehome12
    May 1, 2011 at 12:29 am

    I hear Creative Mortgage is a good company to work with. There toll free number is 866-488-0929. I do not know why someone would call Anthony in human recourse’s? Maybe he can refer you to the right loan officer.

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