Selling and buying a new home? bad credit?

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My fiance and I are getting married soon. He had bad credit around a 500 credit score. Mine isn’t much better, but I also have my current mortgage. I bought my home 3 years ago and since my credit has gone down about 100 points. We are looking to sell our current home and buy a new one. I’m not sure how it works, will my credit be better if I sell my home and allow me to get a loan for another? When I apply for a new home loan do they consider the mortgage I already have? I’m worried if I sell my home I wont have good enough credit to get another loan.
Any advice or information would be appreciated! This was the first home I bought and will be the first one I sell. I’m a little clueless at this point. Please help!
We are selling because we want to move to a new town. We currently live in the city and our looking for a more country feel. I bought my house at a great price and have put tons of work into it. I bought it for 40,000 and as far as I know the current value is 75k +

2 Comments
  1. Reply
    kemperk
    February 10, 2014 at 2:08 am

    you are not sharing with us why you are selling; it might matter.

    I would keep the current house and work like a busy bee at re-growing my credit
    if i were you. I am doubtful if you sell your home and even get out from that
    credit obligation, that you would be immediately eligible for another loan.

    can guide you further

  2. Reply
    Bob
    February 10, 2014 at 2:22 am

    If you don’t have to sell it is best that you keep your home and mortgage. The only way paying off your mortgage could improve your credit is if the payment is so high it is preventing you from paying your bills on time and If you are looking to buy another home I assume that is not the case. With credit scores in the 500 range it is not realistic to expect to be approved for a new mortgage or any new credit, so the best way to improve your score is by making timely payments on the accounts you already have. Most lenders require at least a 620 score to qualify and many use 640-660. Any non-medical collections or judgments will need to be resolved before you can qualify for a new mortgage, and keeping all revolving account balances below 50% of your limit will also help to improve your score to a range where you can be approved. As your late payments move further into the past, the less effect they will have on your score.

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