I applaud your hard work! It is very difficult and time consuming to work on getting your debts paid off and your credit score to improve. I understand your eagerness to look at properties, however, it is best to wait until you have the pre-approval letter in your hand before you begin your search. It is frustrating for all parties involved (including you) if you fall in love with a property and want it and are not able to get an accepted offer because you don't have a pre-qualification letter. What you CAN do in the meantime, is look at available properties online! This will give you plenty of time to do your homework. You will have a great idea of what the values are in the area you are looking in. You can ususally see multiple pictures of any property and even sometimes take a virtual tour. This will help you to stay connected to the process while you wait for your score to improve. It is always fun to involve your children in your online search as well...Best of luck to you!
Everyone on this post thus far has seemed to agree that it is best to discuss things with an experienced Mortgage Professional first before proceeding further. My name is David Youngs and I am a Mortgage Consultant with an office over in Roseville, MN. If you have not done so, I would be happy to take a look at your situation and offer some advice on the steps you could take to improve your credit. If you need more help than what I can provide also, I know a great Attorney that specializes in this that I could refer you to that would also be willing to offer a you free consultation. Feel free to call or email me at your convenience if you would like to have a conversation! Thanks Dana!
David Youngs - Mortgage Consultant
Progressive Lending Solutions
651-636-2840 Ext 12
Email - email@example.com
Getting your score up will pay off with a lower interest rate, and in the long run that can add up to a nice savings. I do think looking virtually online is a great way to educate yourself on the market, and also keeps your ultimate goal in mind. So; be patient, look online, and when your loan officer tells you that you can get a better rate because of your hard work and patience, then dive in to the home buying waters.
By the way, I was a great lifeguard before I became a Realtor.
In the meantime, you can "look" at homes in a number of ways: a Realtor can set up a search program for you in which you'll be able to track the market, you can visit open houses and you can periodically visit homes with a Realtor who understands that until your financing is in place looking at homes during this time is meant to help educate you as to values and choices in different neighborhoods and markets.I've been a Realtor for 30 years and for the last 5 years have been working a lot with the most experienced and knowledgeable mortgage loan officer I've ever met. Please email me or call me if you'd like their contact information.
There are options out there and they all depend on your situation, but not always dependent on credit score. I allow clients to utilize my search tools any time as people in general enjoy looking at homes. This is obvious in your case to as you are here on Trulia. Let me know how I can help.
Let me know how I can help.
When you say $2000 of negative history, whether you have collections, or judgments, or just balances of credit card debt or loans remaining may make a difference in what you may need to pay off or not prior to qualifying. If it is a score that needs to be improved, there are also suggestions for doing so quickly depending on your history and what needs improvement upon. I would definitely contact a loan officer and/or credit repair service to determine what the best actions may be for your situation. Be wary however when contacting a credit repair service to make sure they are legitimate and knowledgeable. Also, depending on how much your score needs to increase prior to qualifying a timeframe can usually be estimated as to how long that may take, and a loan officer and credit repair service can probably give you the best indication of timeframe. With that said, if it is something that likely can be attainable quickly, you are in luck and I would say start looking so that when you are approved you will have an idea of the area market and have made some comparisons as to what you want. If it is a credit repair that may be more extensive, you may consider looking into a lease option where you could move into a home now with the option to buy when you are qualified for financing, or consider a contract for deed, which is a purchase of a home now where you can make payments to the seller directly rather than obtaining a mortgage. That type of purchase can typically be refinanced to traditional finance within 2-5 years once you are able to qualify for financing. Keep in mind with a contract for deed option or a lease option, that will limit the homes available that you can look at as only some sellers will offer those terms. Most homes for sale will require traditional mortgage financing from a buyer. Also, with a contract for deed, most sellers do require a down payment of 10-20%. And lastly, if you do decide to make an offer on a home with a contract for deed, it is recommended that you work with an agent to represent you that is familiar with contract for deeds, as well as have an attorney review documents as there are additional considerations to keep in mind when negotiating a contract for deed. Good luck in your home search and if I can be of further assistance please don't hesitate to ask!
Minnesota Realty Inc.
Steele V. Propp
You may be able to get a mortgage, but, chances are, until your credit score comes up, you'll most likely pay a higher interest rate or even have mortgage insurance. Do you have downpayment money? That's another thing to remember, the 0% down programs are no longer.
I agree with Aaron, you need to talk to a lender to get the REAL picture on what you need to do.
Stay in touch if you need more info.
To answer your question you can start to look at homes whenever you are comfortable doing so. It is never a bad idea to be familiar with the market so when you can purchase you will already know the market and well feel comfortable with your purchase.
The question I have for you is have you had the opportunity to meet with a loan officer yet. The reason I ask is in the past I have had clients that thought they had issue to find out later that they were still able to get a loan. So my suggestion to you would be to meet with a loan officer and see exactly what your issues are and how to improve them. The loan officer I work with actually gives my clients a work sheet as well as tasks on what needs to be done and a timeframe inwhich to do them to purchase their next property. If you would like I can put you in contact with him so you can begin the process.
Kurt Evans 612 282-5169
Looking online is the best place to start. Become familiar with what homes are on the market and what they are going for. Create a list of features you want to have and need to have for your next home and see if there are homes with fit this criteria in a price range you can afford.
The next step will be to talk to a local lender about your credit. Your negative history will be reflected in a credit score which may dictate when you can buy. If your scores allow you to qualify for a mortgage, start looking. If not, discuss what further steps you can take to improve your scores.
You'll likely need a down payment too, so again talk to a local lender to find out what programs are available in your area and how much you need to save.
Best of luck buying.