Mortgage financing with bad credit?

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I’m looking to purchase a highrise condominium in downtown Houston next September.

I have what is considered deplorable credit by 99% of rating services, but good enough that I was able to finance a new car through a major lender this past summer. By then I should have well over $ 10k put away.

The average cost of the condos I’ve had my eye on are anywhere from $ 85-130k and I estimate that I could talk them down $ 5-10k if they really want to sell quickly.

My question is, even with the terrible credit, will I be able to easily find someone who will grant me the loan with reasonable terms? While I’ll have enough for 10% down, I still worry about closing costs and would like to still have something in the bank when it’s all said and done.
580 is what I hear is the “magic number” so to speak, and I’m not too terribly far below that, but like I said, I was approved through a major and very reputable bank this summer for my auto loan and hold two credit cards which I make timely payments on and keep the balances low.
Ok that all sounds good, but I’m pretty set on a condo. I’d like to buy it, build some equity, hopefully pay it off early, and have the option of using it as an ivestment property if I ever decide to move.

As a first time homebuyer do I have to get an FHA?
I have been pre-qualified based on my income. My car loan is actually at a very good rate considering my credit score. (around 10%…high, but very good for someone with my score)

2 Comments
  1. Reply
    golferwhoworks
    May 17, 2011 at 3:32 am

    probably not if your credit is that bad. Most FHA lenders require not less than a 580 score with clean credit for the last 12 months and no judgments open and no bk’s in 3 years

  2. Reply
    Pengy
    May 17, 2011 at 4:03 am

    At one time 580 was the magic number which is why we are in the mess we are in right now, and you are below that. You will need the high 600’s these days, yes you got a car loan but at what interest rate? Tell you what to do, see if you can get pre qualified then all questions and doubts will be taken away

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