Me and my finacee are trying to buy a house. We both have credit scores around 530. Anyone have any ideas?

Question

We keep getting turned down over and over, surely there is someone who will finance us, we make the money, but our credit sucks. Please help

Answer 1

For a credit score in the range of 585-599, you may have to make a down payment of nearly 5% to be approved for a home mortgage loan. Even in this case, your approval will come from a subprime mortgage lender. You have to approach a lender who deals exclusively in loans for people with not so perfect credit or in situations that cause difficulties in getting a mortgage.

If your credit score lies between 600 – 620, you might be easily approved for 100% financing. Even in this case, you have to approach a subprime lender.

For a credit score of at least 620, you can easily avail of 100% financing, along with a reduced rate of only 1 - 2 percentage points more than the prime rate.

Answer 2

Anything below 550 is considered awful.

You would be paying very high interest rates if anyone would approve a loan.

You need to work on getting your credit score up before you try to buy a house. The two things that will raise your credit score are to pay bills on time. Late payments kill your score. Second, reduce your debt. That means paying off credit cards and not charging any more on them.

Don't open any more credit card accounts while you're doing this. Every time you apply for a new card, your score takes a bit of a hit. You don't want a whole bunch of credit card applications sitting there when the mortgage lender reviews your history next year. You also don't want a lot of debt sitting there so you need to be paying more then the minimum on all the cards.

It will take about a year to see your score go above 600 if you can get your debt reduced and have a years worth of on time payment history.

Answer 3

Go to a private lender. A private lender is someone that is not a mortage company but, has alot of money. Alot of doctors and lawyers do this. You can usually by local papers and look in the section that has LOANS. Usually youll find some that say "WILL FINANCE ANYTHING" or something like that.

Also, you could find someone who is SELLING BY OWNER, and have them seller finance. Pretty much what it means is your paying the previous owner of the house, instead of the mortgage company.

IMO, I would try to find a private lender first.

Also, I strongly recommend that you pay off previous debts. Credit is very important. There are a ton of good books that help you. One very good author, and person, is Suze Orman. She knows a lot and can really help people. She has a TV show as well. You would be surpised how paying something down $100 a month can do. Before you know it, that debt is gone. And also, SAVE, SAVE, SAVE. Cutting back in the grocery department is a good way to save money. Try not to eat out. Buy bread and meat at cheap prices and freeze them. This way you know you have gotten the best price for that item. Freeze whatever can be frozen.

I dont know your particular market for houses but, many real estate experts predict housing prices will go down this year. There are some areas where the home prices are still rising but, alot has come down. Take a look at your market and see.

Answer 4

You should save up lots of money for a downpayment. The less you have to finance, the more apt you will get approved.

Make sure you don't have a lot of debt, get it paid off. Make all payments on time. Don't open any more credit cards or financing cards. Everytime someone does a credit check, your score goes down.

Make sure you pay your credit cards off in full if possible. If you don't have a credit card, you should get one that you use for groceries and monthly bills, pay it off in full each month. This will help establish some credit.

Answer 5

Check your credit reports... correct any errors and try to improve your scores by maintaining a low debt-to-credit limit ratio on your credit card (by paying off the balance) and make sure you pay off any outstanding bills. Make sure that negative information is removed (depending on where you live, it may be gone in 2, 5, or 7 years) and pay all bills on time. Try to raise your FICO score before going in for a loan and shop around within a 2-week period (all of those inquiries will only count as one because it'll look like you're shopping around). Keep your credit card balances below 30% and do NOT close old credit cards. The length of credit history (age of cards) helps you out.

Also, save up at least 20% for a downpayment... that way you should avoid PMI and will be seen as being less likely to default on the loan.

Answer 6

Building credit is can be a difficult task, but from personal experience as a loan officer I can give you some helpfull tips and advice to build a solid credit history.

If you have one credit card, consider getting two, a good source for a list credit cards for limited or no credit is http://www.bad-credit-credit-card-for-people-with-bad-credit.info
Make sure to keep your balances under 50% and make your monthly payments on time.


If your going to a bank, your going the wrong route because of your credit. Seek a mortgage broker, they can get a house financed with a credit score as low as 500.

Answer 7

Me and my husband are going through this right now and we just went and signed the papers today on our house. Talk to a mortgage lender, they will tell you what to do to get your credit up and can also work with your credit scores as long as you have the income. We are getting 100% financed and the seller is paying closing and down payment for us and we are going through The Fannie Mae foundation.. My sister in law and her husband are going through FHA and they are getting the same deal.. It all depends alot on the income you make.. Just get a good lender. If one tells you know DONT give up go to another one. We had to get 2 different ones before we got our approval. But right now is the time to buy a house and lenders will do what they can to make the sell.. So just shop around.
GOOD LUCK THE FINANCING IS OUT THERE NOW GO AND FIND IT.

Answer 8

Your credit score is an indicator of how well you pay back things you borrow. Your history does not look all that promising.

If you loaned money to a friend who said "I will pay you back friday, for sure!" and when Friday arrives he said, "oh, well I took my girl out to dinner so I will have to get it to you next week". Next week it's "oh, my car had a flat and I needed a new tire, I'll get to you in two weeks." In two weeks they come to you and want to know if they can borrow some more money. If you will loan it to them, then they can start paying you back.

This is how credit companies look at it. Your score reflects your level of desire to pay back what you borrow. You start out with no score and then build a history. To them, this is who you are, because this is what you have done.

The best thing you can do is start paying your stuff on time. Credit is available to those with a low score...but figure on 20-30 percent interest payments. It only takes a year or two to repair what you have done but suffice to say you are a victim of your choices.

Answer 9

yes, pay off your back debt wait about 6mo to a year for the score to go up and then try. everytime you have someone run your credit, your score keeps going down. any mortgage company even the high interests one are going to make you pay off any back debt before you can get financed. good luck

Answer 10

When credit sucks it says "person does not pay bills"
Sooo , who will lend you more $$$$$ ?
Only someone who charges 3 arms & a leg in %.
Pay down your other debts the keep paying stuff on time. In about a year of responsible bill paying, your credit will improve & you will save a fortune in % charges on the mortgage.