VERY new to home buying

jefftsnyder · Joined: 11 Jun 2008 Posts: 1 1.77 Dollars($)

So my and my wife are ready to purchase a home. With not so great credit, I'm not sure how to go about the process. Here are the details.

Wife - $79,000/yr 540, 530, 513
Self - $65,000/yr 571, 552, 527

We have been working on our credit recently, using a few cards for limited purchases and paying down our debt. The homes in the area we desire to live average around $250,000.

We estimate that around the time we would be ready to start seriously looking at buying, we should have approximately $20,000 for a down payment.

Any thoughts on what type of loan we would qualify for, if at all? The credit scores are coming up slightly, but they are what concerns me about acquiring a loan.

Thanks.

smckaybiz · Posted: Wed Jun 11, 2008 7:32 pm Post subject:

I think you should seriously consider holding off on trying to get a mortgage until you can build your credit scores up. You would probably have a hard time getting a mortgage right now with most banks not wanting to take many risks and just applying will only lower your credit score even further. If you can get approved you will probably be charged a high interest rate and you might need more than $20K down because most lenders will ask for atleast 10% if your scores are that low. I'm not a mortgage officer myself so hopefully someone will come around that can let you know if or if not you can get approved but I feel that if you could hold off a little longer on buying a home you would be a lot better off in the long run...

Best of luck

gmakerley · Posted: Fri Jun 13, 2008 10:45 am Post subject:

as you noted, you're working on your credit. that's good. you'll want to boost your scores as quickly as possible, of course; and you'll want to get them up to the high 5's at least.

some lenders (we do it) will grant a loan on an fha product with 3% down payment - you'll have greater than that - with a 585 score and perhaps lower, depending on compensating factors.

i hope you're working with someone to assist you in increasing your scores who can advise you - and i don't mean someone who will help by taking your money as part of that deal.

chrisburns · Posted: Mon Jun 16, 2008 12:17 pm Post subject:

At this point FHA seems like your likeliest option.

I would just continue to try to build up the credit scores. Read as much as you can about the topic online and do your best to build them higher since you have time. If you can get both of your middle scores to a 580 you should have no problem when it comes time to buy the home.

If htey are below 580 it becomes more difficult and you'll want to make sure your dealing with someone that understand the FHA guidelines in great depth so that you don't have to waste your time or money going the process unless it looks like it will happen.

It sounds like your on the right track and I bet you will have no problem getting the financing you need. Just stay positive and continue doing what your doing!

brian1 · Posted: Mon Jun 16, 2008 12:43 pm Post subject:

Why is the credit where it is? Whats pulling the scores down. FHA requires a clean 12 month history and there are lenders that will lend with those scores on FHA BUT you had better be able to prove you are on the right track now.
Good Luck
Brian

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