I always wonder however about the wisdom of buying when your credit is so low. Low credit scores often reflect large credit card balances, missed payments, and some back log of people you owe money to. So, to add another debtor to your life makes little financial sense to me.
I would encourage you to work with a reputable lender in your community, review your credit thoroughly and see what you can do to bring it up - if necessary, paying off some debts first. Your interest rate will be affected by your credit score so the higher your scores, the lower your interest rate.
Best of luck.
With your credit score you probably have credit card balances and perhaps unpaid balances that have gone to collection. PAY THESE OFF before attempting to buy a house.
Banks, perhaps understandably, want to deal with credit worthy borrowers...show them you are that person by paying your debts off, or at least down. You will not be able to take advantage of the lowest mortgage rates with your credit score being where it is.
Best of luck.
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.consumer.ftc.gov/articles/0058-credit-repair-how-
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.
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
Ana Benavides, Mortgage Advisor