I want a home. But my credit score is 520. PLEASE HELP!?

Question

I am currently renting a home for 900.00. i am renting from an individual. I make 3780 a month. I THINK I can afford a home. The problem is that the lady I am renting from wants to sell this one. I don't want this one. So I have to move. The problem is i have been submitting my info to serveral renters and home loan officers. I found a rent house. I have given him my 1025 deposit and I am also waiting to hear back from home loaners. I don't know what to do. Do I move into rent house or wait for loan companies! Please Help!

Answer 1

This site has lots of loans for your kind of situation http://allsolutiosnetwork.com/FH/FH54617

Answer 2

I don't know where you live nor the prices of homes in your area. If the prices are right, you have a fighting chance of getting you a home. I see that you are currently paying $900.00 per month for rent.

You have a challenge or two to overcome, but they can. You interest rate will be a little higher, your choice of mortgages will be an adjustable rate mortgage fixed for either 2 or 3 years. Select the one that you would feel comfortable with. The rate and payment will be the same for 2 or 3 years, that will be determined by which you select.


Once the 2 or 3 year period is up you should refinance your home to a new mortgage. Now that depends on if you have paid your mortgage on time. If you have you will not have any problems what so ever. If you have not you will be in the same situation as you are now. If all else fails make sure that you pay your mortgage on time. Please do that. By paying your mortgage on time it will increase your score and the 3 years will give you time to get back on track with paying your other debts.

My take on real estate is that you should buy real estate and wait, not wait to buy real estate. That same place you will buy today in about 3-4 years will be a few thousand dollars more. That is equity that you would have built up over the same period. Remember the interest you pay on the mortgage no matter the interest rate is tax deductable. check with your tax advisor for any and all tax questions.

You need to select a "Mortgage Broker" that deals in sub-prime lending with your score. Stop going from broker to broker, if you have submitted your application to a few already select the one that you think will do the best job for you, the most important thing is make sure he does sub-prime loans. If he does not you are wasting your time as well as his, so find one that does. Call the ones you have submitted a loan request to and see which of them that specialize in sub-prime lending.

He will request personal information from you that you should supply as soon as possible. He will secure you a loan pre-approval.

Once you have your pre-approval you may go shopping for a home, either with a realtor you know or with one the mortgage broker can provide for you.

Once you have found a home for yourself, the real estate agent will get a contract drawn up between you and the sellere for both of you to sign. He will also provide a copy to your mortgage broker.

Your mortgage broker will at that time order an appraiser to verify the value of the property.

Your mortgage broker will probably want additional information, but that is normal, so don't blow a gasket.

He will also open escrow closing agent, secure a title report for the property, order loan docs for you to sign.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 3

WOW talk about a lot of answers. some of them, from the mortgage banker and broker were reasonable. the others that tod you not to buy (if you can) or that you cant because of your score and even the one that told you that you will have to take a 2/28 loan with a pre-payment penalty ... well lets just say THEY ARE WRONG!

it is a much more complicated anwer and difficult to truly answer not knowing your entire situation. first, the price of the houses that you are looking at is very important but guessing based on what you are paying in rent right now the houses in your market place are probably under 150,000 and if you are makling about 45,000 or so a year you should be able to afford a house and given the right set of circumstances you should buy one TODAY!

there is a grantprogram that will help you with a true FREE grant for the downpayment and closing costs. you should check out www.libertygrant.com.

you can call me at 1-877-543-3711 or email me at [e-mail]. i am a nationwide lender that is the exclusive lender on this program. when we look at your credit we do not use the scores to qualify you. we look at it as an overall picture and make a common sense lending decision. very often, we can work through your challenges and if we can we tell you right away.
good luck

Answer 4

Take the rental property and take the next 6 months and dedicate time to fixing your credit or bringing that low score up. It wont take long to get your credit in order. I started working on my credit in January which was 529 and my score is now 645 and growing. Start by disputing any negative information on your credit file eeven if it is yours. Keep all revolving debt down. Meaning: If your credit limit is 500 try to always have 400 availble credit. Dispute inquiries too. If your score gets to at least 620.
(and thats middle score) you can get 100% financing with no money down. Remember this. The lower the score the higher the payment.

Good luck

Some of the things that J O is saying is correct however as you can see he's trying to get a sale.Yes you could get approved for a loan now but with a low score like that your interest rates will be high which will result in a high monthly payment. .Work on your credit girl. I just closed on a 2 unit, purchase price 379000.00, with a middle score of 623.

Answer 5

Why is your score a 520? If you THINK you can afford a home, why don't you take the money you would spend to get into a home and fix your credit, which would in turn get you a lower rate, cost, etc when you are ready to buy.

With a 520 score, most lenders can typically approve someone for 70-80% of the purchase price, therefore you would need to have 20-30% to put down on top of any costs.

What Amanda said it true, and it is NOT fraud. J O is actually the one at risk here for fines and jail time for publicly accusing another lender of fraud in itself. It is a violation of R.E.S.P.A. and can result in not only the revocation of his ability to originate loans but his entire company.

What Amanda was trying to get to is this, when you dispute a tradeline on your credit report to the bureaus, by law they have 30 days to respond to your dispute. If they do not, they MUST remove the disputed tradeline, no questions asked.

Don't believe everything you hear, there obviously is a lot of bad information out there, and good luck.

Answer 6

essentially a score of 530, assuming it's your middle score and not your high score, will require you to make a sizeable deposit in order to obtain a loan. usually with this kind of score the deposit needed is around 20%. quite a steep price to pay really. some lenders will give you 100% loans however the rates will be overwhelming and if you don;t keep on top of your payments, you will foreclose. stay in the rent house and either build up your credit again or start saving up for that deposit. if you can get your score around the 650 and up mark you generally won't have to pay the deopsit.

Answer 7

A privately financed sale might be an option - if someone will essentially sell you the property in return for a monthly income, rather than a flat out payment.

Otherwise, you are better off working to repair your credit. Pay off all your credit cards, and work on not missing any payments for at least a year on anything. Once your score is up a little, you'll have a better chance of buying something affordable without huge costs/restrictions.

Answer 8

You should wait until you have sufficient credit to purchase a home. Also, if you have a fair down payment, this is going to help you tremendously. You may want to continue to rent until you have saved enough for a down payment.

Also, your credit score may go up if you pay off all credit balances off at least 50% or more. Once you do that, it may take a few months for the score to go up, but once it does, you will be a good candidate to take a loan out.

Answer 9

At 520, any approvals you get will include a 2 year prepayment penalty and astonomical rates-- which means you'll get MUCH LESS with home ownership as far as space and quality than renting.

Pull all three reports through the credit bureaus and dispute Every single bad item-- even the legitimate ones-- and see what you can get removed. Then pay down your balances on your cards to under 40% of their limit. Make all your payments on time. Dont close any of your older accounts.

You need to get that score up before trying to get a home.

Answer 10

All these answers give you ideas, and here's one more:

If you have paid your rent on time every month, and can provide cancelled checks (front & back) to prove it for 12 months, it's possible you could qualify for several government programs like FHA, VA, and other community programs. There's also down payment assistance money available. These programs offer very competitive interest rates since they are trying to get renters into their first home.

I am in Ohio, so if you are outside Ohio, I can probably recommend a reputable company in your area.

Answer 11

Amanda and Darren are both incorrect. I am a mortgage banker (much different than a broker) at one of the largest and most esteemed mortgage banks in the Midwest, although we do lend nation wide. I have seen people with scores in the low 500s be approved for homes. One of the things that Amanda is advocating is clearly fraud, and is punishable by jail time and fines, I would not suggest that route although there are some things that can be easily and legally done to boost credit. It is impossible to know too much about your situation without receiving further information from you. I would encourage you to send me an email with any questions that you may have. Because I am a mortgage bank and not a broker I lend my own money and have a lot more flex in my requirements.