Looking for information about buying a house with bad credit, any advice?

Deal Score0

We got married in January. She has almost no credit history, I have a horrible credit history (Score is currently 549, but rising) thanks to my ex wife and my parents having used my name. I’m 26, she is 23. Together, we have a combined household income of about $ 52,000/year. We really dont want to pay rent anymore as it is quite the waste of money, so we are looking at buying. However, we are very aware of the fact that we are in no position to be applying for loans/mortgages. What options are available to us and how do they work?
Ok, let me say again. Our credit score is currently 549. We could not currently get a mortgage. And we dont wish to continue wasting money on rent.

7 Comments
  1. Reply
    HC
    May 3, 2011 at 11:24 pm

    Yes, go to your local bank for the best rate/lowest closing costs, mortgage brokers are much higher. Theres a few that spam around here…

  2. Reply
    Roger C
    May 3, 2011 at 11:55 pm

    Keep working on your credit score. Pay off all CCs, car loans etc if you can. Start saving for a down payment. At least 10% (preferably 20%) will make it easier and cheaper to get a mortgage.

    A credit score of 720 is needed to get you the best mortgage rates. Anything less will probably cost you 1-1 1/4 % more and on a 30 year mortgage that is a lot of moolah.

  3. Reply
    amstarlender
    May 4, 2011 at 12:38 am

    Well, with your current score you could get a conventional loan but the rate would be high and only a 2/28 arm product. I think you should look into a FHA loan, these are not score driven, but trade lines and you can use alternative trades such as phone bill, insurance ,doctor bill etc. You will have to write a letter of explanation as to your late pays but you should be able to get through that or your loan officer should assist you, if not get another one. This will be a lower rate and affordable to your new family. This is your best bet, I do them all the time. Good luck

  4. Reply
    Rick S
    May 4, 2011 at 1:33 am

    I am a mortgage professional with a large mortgage bank. Has your pay history been good the last 12 months? Is your rent always on time? It is not true that you are in no posistion to apply for a mortgage. An FHA loan might be for you. It is a loan that is backed by the federal government and has been around for decades. The minimum investment by the buyer is 3% and the seller can contribute to your prepaids and closing costs. As a matter of fact, the seller can contribute all of the money for you down payment closing costs and pre paid items. Call me At 574-243-8792 x 282 I will explain the whole situation to you.
    Worst case scenario, you rent for another year, save money, pay off debt, and then buy a home. Most land contracts will want alot of money down and charge you an outragous inrerest rate.

  5. Reply
    Patrick G
    May 4, 2011 at 2:12 am

    with what has been happening in the lending business in the last month, you have almost no chance of getting a loan. If you have some down payment, like 10% then maybe you have a chance.
    get some down payment, and have your wife start applying for credit cards, in her name only. after 1 or 2 years, she will have agreat credit score. that is the best way to buy.
    FHA is credit driven and wouldn’t touch you.
    All sub-prime is now much harder to get loans. work on your credit and your wifes.

  6. Reply
    Brad H
    May 4, 2011 at 2:16 am

    If you’re still interested you can contact me for a quick app to see what we can do for you.

  7. Reply
    newway
    May 4, 2011 at 2:43 am

    Have you tink of renting a place with the option to buy it in 2 or 3 years? It may give you some credit for the money you pay for rent.

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