First, it's never good to be "desperate to buy," "beyond sick" of the status quo, and again "desperate." You'll find yourself doing things that aren't in your best interest. You'll find yourself taking advice you shouldn't. You'll find yourself listening to people you shouldn't. I understand where you're coming from, but try moderating that desperation. Channel it into a resolve to boost your credit score, save some more money, and perhaps in a year buy a home. I'm not sure that now is the right time, both because of your credit score and history and because of your current desperation.
Second, Diane's suggestion about rent-to-own (lease-options) is a pretty good one. It's a rental that allows you, at your option, to purchase the property. It can't be sold out from under you. And a 2-year lease-option would give you plenty of time to clean up your credit.
But do some research on lease-options. (I've written one e-book on buying homes without getting a new mortgage, and am finishing one specifically on lease-options.) The information below (not Diane's) on lease-options is incorrect. For example:
[Don't do it] "unless you take the proper steps to protect your earnest money deposit (down payment which is usually nonrefundable in a rent to own situation unless you actually purchase)"
COMMENT: The up-front money is NOT an earnest money deposit. Never. In a lease-option, it's an option fee. That's very different. And, yes, it's usually nonrefundable. The reason: The option fee is consideration for the option. Whether you exercise the option is up to you. It's sort of like buying insurance in that you're getting a benefit even if you don't use it.
"My suggestion is to get a home inspection on any property before you enter into a home purchase."
COMMENT: No argument there. Not sure why it's mentioned here.
"Definitely have a realtor represent you in this type of purchase!!"
COMMENT: Not necessarily. If the house you're lease-optioning is listed on the MLS, then use your own Realtor. One who knows what lease-options and lease-purchases are. But lots of lease-options aren't on the MLS. I'd suggest, in that case, that you use a lawyer familiar with lease-options. You really ought to have a lawyer in any case. And you know the first thing a Realtor will tell you when you ask any legal-related question is: "I'm not a lawyer and I'm not permitted to render legal advice." And that's absolutely correct. So when you ask: "How do I cloud the title so the owner can't sell the property out from under me?" Or "How do I protect myself if the value of the property drops?" Or "What can I do legally if the seller changes his mind and decides he doesn't want to sell it to me?" you're going to be referred to a lawyer. And you should definitely have a lawyer review the documents. So, use a lawyer. A Realtor for a non-MLS property is optional.
Hope that helps.
By doing this, you buy more time to improve your credit while living in your "own" place.
â‰ˆâ‰ˆâ‰ˆ Mott Marvin Kornicki, REALTORÂ® â‰ˆâ‰ˆâ‰ˆ
Aventura | Bal Harbour | Sunny Isles Beach
â‰ˆâ‰ˆâ‰ˆâ‰ˆâ‰ˆâ‰ˆ "â˜…â€ This is the House â€œâ˜…" â‰ˆâ‰ˆâ‰ˆâ‰ˆâ‰ˆâ‰ˆ
Speak to a local loan officer that is experienced in credit repair. It could be something as simply as you paying down some debt, removing a reporting error off your credit, or having someone add you as a co-borrower to one of their credit cards. All of which and more a knowledgable loan officer will know what to look for a do on your behalf upon speaking to you and reviewing your credit report. Ask a realtor to refer you to a LO that can assist you.
Lastly, since you'll want/need to go FHA, make certain that LO is experienced with that type of financing as well.
You are not too far from 620, go to a lender and get their advise on how to bump you up to where your FICO's need to be. Perhaps taking a little of the money and paying something down will right away boast your credit to where it needs to be.
You should look into a rent-to-own purchase. In this type of situation you typically pay a slightly higher than market rent amount for a set period of time (often 2 years), with some portion of the rent going directly towards your down payment. You have the option to buy after that initial time period expires. But that initial rental period gives you time to work on improving your credit score, while living in the place where you want to settle down.
I hope that helps. Good luck!
The blog below gives some ideas how to improve your score. It was written by a man in the business.
Your score is still low. Talk to a local lender. They may be able to help you get a loan you can accept. They may even be able to give you great personalized advice on how to imp[rove your score in a relatively short time.
Some things to do if it will be a year or more before you can buy a house.
The basics of home buying in a simple easy to understand way.
If those were helpful I have other blogs covering other aspects of buying a house below. Feel free to look.
I would evaluate why your score is where it is. You are making good money and have reserves, so you should be able to increase your score.
Talk to multiple experienced mortgage broker to find out what loan programs there are available for you.
Bill - 770-255-3831 (Atlanta).
I just signed a 7 month lease, which is an option. They gave to me at the same monthly rental rate, but sometimes they charge a little higher for the 7 month lease. I know moving into another rental is not what you want now, but I do feel like there will still be good home prices in 7 months to a year, and you definitely do not want a nonconforming rate. =( You will miss out on the tax credit opportuninty. Bummer.. but much better than getting into a high interest rate loan that can hurt you later.
Open 1 or 2 new small !!!! lines of credit, like maybe a secured credit card or small purchase at Best Buy (cd player type) with 12 months no interest no payments and pay it off in 7. Those are always easy ways to get credit. Buyng large purchases of course is not a good idea.
Have you actually applied for a mortgage yet? You should see somoene, it's free to get pre-approved in most cases.
Someone who can see your full financial situation can give you a better idea of what to expect, and what you can do.
If you credit issues are over 2 years BASED on issues can take 60 - 90 days clear IF completed correctly. I owned a credit repair company for 10 years consultant to many
It is your mid score concerned about
Confer with mortgage broker determine if your can secure a loan IF YES GREAT
You would need 2 years solid employment, 3.5% or more down payment, debt to income ratio in check