Credit Score in Portland>Question Details

Bl9057, Home Buyer in Portland, ME

Bad credit home loans with a decent down payment, hard to get?

Asked by Bl9057, Portland, ME Wed May 9, 2012

We are looking to purchase a home in the near future the problem is we both have very low credit scores (bad credit) our scores are 580 and 564. We have been working to rebuild credit ie; credit cards, new car loan. We aren't looking for an expensive home, trying to keep it under $150,000 and could put down a decent amount. And possibly could be able to get va backing. What are the chances of finding a loan?

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Trevor Curran’s answer
We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.


It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website http://www.consumer-action.org/.


Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE. http://www.ftc.gov/bcp/edu/microsites/moneymatters/dealing-w…


The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.


Trevor Curran
NMLS #40140
0 votes Thank Flag Link Tue May 15, 2012
Perhaps the key is this VA backing you mention. Basically what you would be getting is a VA loan,,so first off thank you for your service. Second the design of the VA loan is that you do not need to bring in a down payment, thus these funds you are talking about might be best used to pay off your credit cards, or this new Car loan.. your credit will surely increase and debt to income ratio will look much stronger for your loan. Sadly, when someone who is serious about purchasing a home and goes out and buys a new car instead of a new home many lenders wonder why and if they can afford both. Hopefully this new car is really a used car that has low payments as one always must fully understand what their priorities are. For some it is a shiny new car for others it is a home in which to own . As for $150K home, the VA Loan can definitely handle that for those who are approved. Best thing to do is find a Realtor who works with Vets like yourself perhaps one with a "MRP" (Military Relocation Professional) Certificate, they are best suited to helping you and helping you find a Loan Officer that works well with the VA. ,Good luck to you.
0 votes Thank Flag Link Tue Apr 28, 2015
I can assist you. I work closely with a lender who works with a National Credit organization to repair credit for buyers looking to purchase a home. They are very good and inexpensive.

Please contact me directly and I will get you started.

CJ Dubois-Cote, Prudential Prime Properties, 207-615-1663 or cindy@prubay.com

I look forward to it!
0 votes Thank Flag Link Thu May 10, 2012
Having that much helps but the banks may still require better credit. You will be surprised how quickly your credit will go up with the right guidance.

Doug
0 votes Thank Flag Link Thu May 10, 2012
Good to know. Thanks so very much!
Flag Thu May 10, 2012
Thank you all for your wonderful answers! I am just wondering now if it matters to the lender the more money you have to put down? Does that make a difference in getting approved? Like if I wanted to purchase a home for $150,000 and had $100,000 to put down. Or does it all come down to credit. I definately have the means to pay.
0 votes Thank Flag Link Thu May 10, 2012
Each lender is a little different and you are well advised to shop around and find someone you are comfortable with who understands your situation. With you basic criteria, there is probably a way to get financed.
Flag Thu May 10, 2012
I would also recommend Jack Heinzman at RMS, he is very good with all types of loans and helping you build your credit.

I also recommend downloading these free reports I put together. They will help guide you through the home buying experience.
http://www.makemaineyourhome.com/p/free-home-buyer-report.html

Good luck and feel free to contact me anytime.

Doug
Doug@makemaineyourhome.com
0 votes Thank Flag Link Thu May 10, 2012
With VA backing and perhaps a co-maker you may be able to get this done. You could need as much as 20-25% down. I would try several lenders and see if they can offer a program for you. If they cannot do the loan today, they will advise you as to how to improve your credit score and discuss when would be the best time ro re-apply. Good luck and call directly if you would like to talk about this.

Richard Murphy

Murphy Team (207) 712 4796
Real Estate Brokers
Harborview Properties
47 India Street
Portland, ME

property@megalink.net
0 votes Thank Flag Link Thu May 10, 2012
Your best bet in to speak directly with a lender. A good loan officer will be able to address those low scores and guide you best. I would recommend Jack Heinzman at Residential Mortgage Services. RMS funds and underwrites their own loans. And I just had a client go VA with them. His number is 650-4311.

Once you've spoken with him, you'll need a realtor. Call me. I work well in that price range and would welcome the opportunity to assist you.
0 votes Thank Flag Link Thu May 10, 2012
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