Joel Lobb (NMLS#57916)
Senior Loan Officer
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
I would suggest a great starting point of reading Dave Ramsey's, Financial Peace. It's great that you both are furthering your education and hopefully that turns into additional income. As great as the market is right now, it may not be in YOUR best interest to purchase without being ready. I have lenders that can qualify someone with only $500. But with home ownership comes ALL the responsibilities that your Landlord has been handling to this point. Plumbers, roofers, electricians....you pick up the phone if there's an issue right now, but you need to have the yellow pages if you actually own the home.
If you work on getting errors corrected on your credit and more importantly, STOP creating new negative entries on your report, in my humble opinion, by the time you have saved $3-5k for your down payment and a nice emergency fund (so you don't go back to the poor credit ways), your credit will have also aged and your scores should increase.
Rent is sometimes a necessary evil. It gives you time to recover and time to plan. Use the time wisely so when you purchase your home, you get to keep your home.
Fines for committing mortgage loan fraud can range way up in the millions of dollars per incident and up to 30 years in prison depending on location and institution that is defrauded (includes anyone that participates in the scheme especially referring realtors & loan officers that benefit financially).
It wasnâ€™t the sub prime business that caused the meltdown. It was the credit repair business that put people in a mortgage for which they did not qualify including but not limited to sub prime loans. Even the sub prime loans had minimum thresholds. This crisis will not go away; in fact it will get worse as the economy continues to press people. More people are turning to credit repair today than before the meltdown!!!
Do not fight the truth. It always wins.
Find out what you did wrong, do what is possible to change that. Pay off what would help you most first. Fix your actual mistakes. Saying a truth is a lie will not fix your credit or reputation in my opinion. Working the right way to make your score go up will take some time and effort. If a credit score is so horrible it can not be fixed in 3 years something is very wrong.
There are the smart ways, and the foolish ways to fix a credit score. The smart way is also the ethical way.
FHA is probably the best answer for a mortgage. The downpayment is only 3.5% of the purchase price, and all of that money can be a gift from a family member.
If you are looking for a lease purchase option, might want to use a contract for deed instead. A contract for deed gives you a title vesting in the home. At a later date you can then refinance the home into your name. With a lease purchase option, you would still need to buy the home and the language in those agreements that allow part of the monthly payment to be used towards downpayment, doesn't quite work that way when it is time to get a mortgage.
I am not an expert in your field so I will happily defer to you but just to clarify, in my (admittedly sometimes addled) brain, I equated credit repair with what you said- doing what you can to improve your credit rating. I wasn't in any way suggesting that Mw4ds dispute the negative items in their credit file.
Don't know why but I just felt the need to put that out there.
I feel much better now :)
The best way to improve your credit score is to manage your finances. First step it to establish and maintain a budget, Freddie Mac has a very good one on their web site. That may sound boring but it is the key to easily fixing the problem.
Next, make all payments on time, have at least three open accounts (preferably four) with activity monthly, keep the balances below 30% of the limit on credit cards.
Finally, address and pay off any collections and judgments, beginning with the one that has the smallest balance and working to the largest. Try to avoid making payments on them, pay each one in full, activity like making payments on a dormant collection will lower your credit scores. Paying off the smallest will help your scores as much as paying off the largest.
To me, your desire isn't silly. Its just that you guys are a little ahead of yourselves.
Do what Dan says, find someone who can help you with credit repair and perhaps figure out a savings plan.
You guys have a great goal in mind. Graduate college, get steady jobs,repair your credit, save some money and you will not only achieve your dream but you will do it knowing that you can comfortably afford home ownership.
I wish you the best!
Can you buy a house with bad credit? 620 or higher yes, less than that you need to find a lender who also works with credit repair. You could not buy now. But in a few weeks, months, or years when your credit is good again you could buy. Depending on what is wrong you may be able to raise your score quickly, or not.
A real loan will require 3.5% down for fha higher with other loans. However, V.A. loans and usda loans are 0% down.
You have faith that going to school will pay you well later on. Use the same kind of faith to cut your expenses, spend less money, and save a down payment for the future. You might be surprised how much removing many things like a cup of coffee a few times a day at the cafeteria can add up in cash savings.
You might find owner financing, but then what happens when you need to buy a furnace for the house? What happens when the roof leaks and you have to replace it? Until you have some money saved you are not ready to buy and keep a house. You lack the ability to keep it if anything goes wrong, and it usually will.