michael, Home Buyer in San Tan Valley, AZ

My credit score is 540, but the only credit ding I have is a past due judgement for Child Support. I have records of payments however. I want to buy

Asked by michael, San Tan Valley, AZ Sat Dec 10, 2011

I am looking at buying a home for $50,000 or under. I have a stable job and will be able to put down 10-20%. Where can I find a lender willing to work with me.

Help the community by answering this question:


There's something wrong here.

You have a stable job. You apparently have some cash to put down. You're saying that your credit score is clean except for "the only credit ding" of a single past-due judgment for child support. And yet your credit score is only 540? That doesn't make sense. Either your credit score is a lot higher or else there's a lot of other negative information on your credit score.

Check with a good loan officer or mortgage broker. Find out: (1) what your real credit scores are, (2) what the negatives are on your credit report, and (3) what steps you should take to strengthen your score.

Hope that helps.
1 vote Thank Flag Link Sat Dec 10, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
Hi Michael:

My first question would be how do you know your credit score is 540? I ask this because so many people confuse the scores given to them by some means other than actually having a lender pull a MORTGAGE credit report. The results can be vastly different, and it does not sound like you have talked to a lender yet. So, I agree with the real estate agents below, contact a lender and ask them to pull the credit report which will actually be used to qualify you for a mortgage.

I will take this opportunity to make a point, again. What you are going to find is most experienced lenders will not want to work with you due to the time consumed in getting your credit fixed AND then actually getting you approved and through the buying/closing process, when the amount of commission which will be earned on your loan is limited by the Dodd-Frank Act and The Federal Reserve. The Dodd-Frank Bill, while trying to protect consumers, actually did people such as you great harm. It forces all lenders to earn a set percentage on any size loan we do--so I would make less than $600 on you, while I could be spending my time on a $300,000 loan and make about $4,000. Which one do you think experienced lenders are going to gravitate to when the real estate market picks up again?!?

I encourage you realtors to look at this issue now, and use the power of the National Association of Realtors to fix it before you actually can find no lenders willing to help your small loan clients.

Good luck, Michael.
1 vote Thank Flag Link Sat Dec 10, 2011
My suggestion Michael is call around to several mortgage brokers and ask them what programs are available. I received an email last week from a lender that is now doing FHA loans with 580 FICO scores. Check out the big banks as well as mortgage brokers. The amount you are looking to borrow is small - some lenders have a $60K minimum - but call around and see what you find.

Another possibility is ask your agent if they know any "hard money lenders". These are private individuals who loan money. The interest rates may be a bit higher than the banks rates but at the small amount you are looking to borrow - the payment would still be nominal.
Bea Lueck
Rox Real Estate
1 vote Thank Flag Link Sat Dec 10, 2011
Unfortunately, there were only 29 single family homes that came up in all of Phoenix that are priced under $50,000. You can find a few more if you are interested in a mobile home affixed to the property.
0 votes Thank Flag Link Mon Feb 2, 2015
Thank you all for your advice...I will be contacting several of you and will begin getting things in order. I have a great new job and a paying part time business so I will have money for a down payment by June. I just want to put the least amount down considering my situation.

The home will be used for a rental but its MY first home purchased. Currently my wife bought our home in her name. Thanks
0 votes Thank Flag Link Thu Dec 22, 2011
I would also recommend a credit counsellor. Well worth the time and effort to get your credit score up.
0 votes Thank Flag Link Sun Dec 11, 2011
A Credit advisor is probably the right way to go. Check your credit report for errors,. There is also a chance you need to eliminate some credit lines or possibly add some if "credit light"
0 votes Thank Flag Link Sun Dec 11, 2011
Credit score or your FICO score is 540? Eitherway, you need to talk with a lender. It should be a free conversation to have, they can show you where you are at and what you can do to improve your scores so that in the future you can buy a house.
0 votes Thank Flag Link Sun Dec 11, 2011
I help many customers with credit challenges. I just recently closed a loan for a customer that had a similar issue. I am wondering where you got the information about your "Judgment for Child Support" as that is very unusual and it might not be correct. Child Support usually reports arrears and arrangements have to be made BUT if you have been paying on time it might be an error. Best advise I could give without seeing the report is to request a court date and have a court order to make the child support payments cover all obligations you may have. That court order can be used to satisfy the needed documentation to get a loan.
0 votes Thank Flag Link Sat Dec 10, 2011

Your situation deserves attention to find a way to accomplish your goal of owning a home. Lenders vary and not all will be a good fit for your situation. Lets locate one that understands what you have done well and not so well and position you to buy a home.

San Tan Valley is doing really well now, foreclosures have really dropped off in numbers and prices are going up already. Great place to live!
Web Reference: http://www.McVinua.com
0 votes Thank Flag Link Sat Dec 10, 2011
Call a real estate agent! They will happily refer you to a good mortgage lender who will look at your current situation and tell you what you can and cannot do immediately. Even if you don't qualify right now the lender will work with you to ensure you will be able to qualify for a mortgage in the not so distant future and will show you step by step exactly how to go about doing what needs to be done.
0 votes Thank Flag Link Sat Dec 10, 2011
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