First: get a referral to an experienced Local Mortgage Banker. Get prequalified in person by the Mortgage Banker. IF you are then told your credit score is insufficient to qualify for a mortgage loan then you need to put your financial "house in order" before you take on the responsibility of owning a home.
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 have a low credit score and you have a dream of buying a home, here's some simple advice for you.
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.
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Deborah Miller 919-491-2826
These are all great questions. I suggest that you speak with a Lender. If you are not already working with a Lender I will be glad to recommend one to you. I have recently had a Lender to work with some of my clients on helping them get qualified when they were not able to qualify before. There are many programs available to help you get qualified and repair your credit if that is what is needed. Please use caution when contacting them and make sure the company is reputable before starting the process. You also want to be mindful of how often you and others pull your credit score because that can affect your score as well. There are so many factors in obtaining a mortgage so you are on the right track by asking these questions.
I will be glad to assist you in a Lender Referral if needed. Please don't hesitate to contact me directly with any questions about the process.
Have A Good Day!
Stacie Dye, Broker, Realtor
IF you are not already working with a lender feel free to give me a ring.