I need advice about mortgages for low credit scores.?

Question

I'd like to buy a house, in the under $100,000 range, but my credit score is 512. I have verifiable income of $35,000. My husband and I make around $70,000 per year together. He has similar credit to mine. There are some issues on my credit report that stem from fraudulent credit card use and old medical bills that I am working to get resolved. I can make a down payment, around 10%. Also, I'm interested in an older house to restore, since historic preservation is my career field. How can I borrow more than the amount of the purchase price to do renovations?

Answer 1

I can sympathize. To make a long story short, my husband had credit card fraud (ex-wife's boyfriend got a hold of his ss#) and I had a medical bill (not transferred correctly when hospitals switched from one owner to the next ... I decided to pay rather than spend the time/money to fight it). Those alone are not going to kill you. We were told to provide the lender with copies of the official fraud complaint (we were lucky enough to have police report too), and then we paid the medical bill.

But, with your score being that low, you might want to check to see what else is on your report ... we were still at 680.

There are companies out there who handle loans for low credit scores (also known as sub prime). If you are working with an agent, ask for referrals for loan officers who handle sub prime loans. If you go and pick one out on your own, make sure you go to more than one company ... and make sure they are reputable. Since you are in a tight situation they my tried to take advantage of you.

Speak with a lender and find out what you will need to do. Sometimes they can pinpoint ways to help you improve your score.

Good Luck!

Answer 2

The answer is complicated.

You really need to work on the credit score by getting your bill in order. That is something to do even if you were not trying to buy a house.

Having a larger down payment will reduce the lender's concern about the score. Once you get to 30% down many lenders will go pretty low.

It sounds like some of the items on the credit report could be removed after you prove that you were not at fault.

You can negotiate with people you owe to pay off less than the full amount. You can also negotiate to have negative credit items removed if you pay off the bill. They can pull the item if they are the original lender that put the item on the credit report. Old medical debt was likely sold one or more times so you might not be dealing with the original lender.

You can consider creative financing techniques for properties that you will fix up quickly and sell. Hard money is one option. A lease/option is another way.

Borrowing for repairs is difficult as many lenders will only lend up to the value or the sale price, what ever is lower. If you had other assets and a better credit score they become more flexible.

Maybe the best plan is to not buy a home but buy property that you will fix and sell so that you get lump sums of money. Then use the cash to deal with the debt and build up a bigger down payment for a home. Consider partnering with someone who can fund a project where you supply the labor and manage the project. Or just flip a few deals where you never go on title as the owner so therefore do not need to obtain financing.

Check the website noted as there are articles and success stories from others who were in similar situations.

Answer 3

First, talk to a loan officer. One who can do both FHA and Conventional loans. Both types have "fix-up" type loans where you borrow the purchase money and the repair money.

BEFORE you start paying off debts, talk to the loan officer!!!!!

FHA probably won't require the medical debt to be paid. I hope you have not yet contacted the medical collectors.

Is your husband's income verifiable too? You may need to wait a bit and get your scores up a bit.

Good Luck!!!

Answer 4

it is low for a intent. spit it out. so you'll get aid. past due repayments, they're going to simply age. assortment models you must repay. are you maxing out playing cards? pay them off every month. ask and also you shall acquire (the solutions and aid you wish to have) if you happen to suppose your credit score is well, you're not ever going to get a residence.

Answer 5

I am a loan officer for last 5 years.Drop me a line to my email:
[e-mail]
Reading your message, I do have certain programs that you may be qaulified for.I donot know, if you can furnish more info. I would be glad to assist you further.
Thank you.

Answer 6

Credit card fraud? You are up the river without a paddle