Financing in Louisville>Question Details

Mw4ds, Renter in Louisville, KY

This is might sound silly, but we are on a SSI income, we pay 550 in rent, I am tired of renting I want to own a home, is this possible, me and my

Asked by Mw4ds, Louisville, KY Mon Jun 21, 2010

Louisville, KY
..husband are both in college, with poor credit, but we really want to own a home. It makes no sense that we pay almost 600 a month in rent but can't get a mortage where we will pay less than that. We are looking for homes that have a lease option to buy, we have about 500 for a down payment and that is all, Please Help, Thanks Rev. Dominic
If somebody knows of somebody that could help us that would be great also!

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Mark Atteberry’s answer
Rev. Dominic

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, 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.
0 votes Thank Flag Link Thu Jul 1, 2010
620 is the bottom score (again with few exceptions) that lenders will permit. Below a 620, then you're in a world of hurt. Even at 620, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan. 700 is when you really start to get in the "as a lender we love you" credit score. 720 is even better.

Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
0 votes Thank Flag Link Tue Aug 6, 2013
Hey there, I was simply pointing out that credit repair in the traditional sense which is to dispute everything in the credit file that is negative is loan fraud when it is done in order to get a loan. Many realtors and loan officers are not aware that most of the credit repair companies instruct our clients to do this. Hardly a day goes by that I do not receive an email or phone call from one of these scum bags pretending to provide a legitimate service. When I ask them if they instruct or imply to the client it is okay to dispute accurate information, none of them, not one, will give me a direct yes or no answer. They know it is wrong and pretend it isn’t.

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 wasn’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!!!
0 votes Thank Flag Link Mon Jun 28, 2010
Many good answers on here and I'll add a little also. The Home Partner Ship Program is an excellent way to get hands on help. The cost will surprise you and even delight you. Once completed you'll have an eye opener on how to buy a home and keep it. There are special Home Loan Programs that can help when your short on cash. This will not be a quick fix and as long as your end goal is for improvement then you will succeed. Stay focused.
0 votes Thank Flag Link Sat Jun 26, 2010
When I say try for credit repair I am talking about doing it ethically and smart.

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.
0 votes Thank Flag Link Tue Jun 22, 2010
It would be a good idea to review a copy of your credit report to see what information is being reported. It's always possible that items that have been paid in full need to be updated. Time has a way of healing credit wounds, so it may be several months for your credit score to be at 620 or above. Or, you may be pleasantly surprised. Credit repair, even if it is effective in elminating some of the issues, is typically temporary. You can easily accomplish some of the corrections on your own for free.

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.
0 votes Thank Flag Link Tue Jun 22, 2010
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 :)
0 votes Thank Flag Link Tue Jun 22, 2010
I disagree that you should seek credit repair. Many credit repair companies suggest you dispute all negative items in your credit file. Disputing accurate information that is negative in order to get a loan is fraud and not a good road for a minister to travel down. Besides, many mortgage investors will NO LONGER accept credit reports that contain disputes. If you think disputing something is an unpleasant task, try disputing a dispute!

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.
0 votes Thank Flag Link Tue Jun 22, 2010
Your ability to buy would depend on a very healthy downpayment, your credit rating, and if you can qualify for a mortgage. You may qualify for some of the special programs for low income participants. If you are able to find a lease option you may have to put up non-refundable option money. I suggest you go to a loan officer and find out what you can qualify for.
0 votes Thank Flag Link Tue Jun 22, 2010
I think Dan gave excellent advice.

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!
0 votes Thank Flag Link Mon Jun 21, 2010
Hi Rev Dominic, Get yourself pointed in the right direction by contacting a local real estate agent. He/She can get you started with a great lender and help you determine your buying power.
0 votes Thank Flag Link Mon Jun 21, 2010
Can you get a mortgage based on SSI? If it is expected to last for a very long time yes. If temporary no.

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.
0 votes Thank Flag Link Mon Jun 21, 2010
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