It's not a dumb question at all - the lending regulations and guidelines change all the time. My advice would be to get a local, full-time loan officer to review your particular situation and figure out the best way forward.
Call me if you want the number of a good loan officer,
The Pinnacle Group at Keller Williams
512 694 8873
Maybe you could have someone look at your credit and help you get those scores up a little?!?!?
As you are now, it is a bit of a longshot. But not impossible. Getting over 560 - 580 FICO will help.
The co-borrower will help quite a bit.... But they do NOT cure all of your credit problems. If you have derogatory credit posted within the last 12 months, it will be all but impossible.
Good luck. Let me know if I can answer any follow up questions.
I can tell you from experience what will probably happen. Your situation is very similar to clients I am currently working with. While anything is possible, this is the most likely scenario.
Your credit score will disqualify you from an FHA loan. It is too low to yield a result in the mortgage broker's model (mortgage guys help me on the terminology).
If you were able to somehow get by that, your late payments would come back to haunt you. You need to have a clean payment and rental history for 12-24 months respectively.
Your father's credit score is good enough to qualify him for the loan, but he would not be able to put you on the loan, since you do not qualify, therefore he could not co-sign. This means that he will have to qualify for your loan amount AFTER taking his own mortgage and debt away from his income. Basically, he would have to qualify for a double mortgage.
Your downpayment amount is sufficient to satisfy FHA requirements, but there are also closing costs to consider. These can be as high as 5% ($5000), depending on your lender, taxes, etc.
Please feel free to give it a shot. Pulling your credit for an application will not substantially affect your credit score and it is free. But I fear you will probably hear something similar to what I just told you.
I am no mortgage expert, nor am I a credit expert. My best advice, based on observation, is to settle your debts or enroll in credit repair and stabilize your payment history for a few years. Save up another couple thousand dollars and try this again when you are better equipped. If you have any questions about the next steps, I am just down the road. :)
Your dad will have to qualify for the home payment to be the borrower. I would try to put you on as a co-borrower. This requires two separate loan applications. This way you would be on the loan from the beginning and it would help your credit score immediately. If this won't work then your dad would be the sole borrower and would have the home in his name solely. I would then try to put you on title before before the loan closes. If you make the payments to the lender for a year and your credit improves thru a credit repair program, then you could refiance the home in your name and then your dad would be off the loan.
I hope that this helps. If you have any questions don't hesitate to call or email me.
I would still speak with your lender to see what you need to do to be most effective in raising your credit score. For example pay off your credit cards and close the account.... sounds great until you get to the close the account part. Because closing the account will cause it to drop off your acrtive credit effectively lowering your score. Pay it off and lock the card in a drawer is a better course of action. Talk to your lender to get pointers on what you personally can do to raise your score. I wish you the best of luck!
Betina Foreman, Realtor Austin Texas
I would speak with a good lender. You need to have them help you determine exactly how much house you can afford. The loan programs change all the time as do the rates and qualifications. If you have not spoken with a lender, please go to my site there are several exceptional lenders listed. The site is http://www.BetinaForeman.com then choose area links/local service providers/ mortgage lenders. One of them has a program where they will pay your closing costs, which will save you about $5000. Give them all a call and see who you like.
I highly recomend choosing a local lender as the people you get from a big lending website will not be as responsive to your needs. I have helped clients that went online to find the best rate and you get whoever is next in the phone que and everytime you call you get someone new. This makes the loan process more challenging.
If you wish to know more about me, please go to http://www.ActiveRain.com.I wish you the best of luck and please call me if I may be of further assistance.
Betina Foreman, Realtor Austin Texas
This is kind of throwing a wet blanket on your situation but have you thought about renting for a while longer and saving up a bit more cash for a downpayment?
At 4,000 dollars you are bringing 4% down to the transaction which is very low. Even if you did qualify for a loan with your credit score your downpayment is a detracting factor in the process. I would suggest saving up at least 20% of the purchase price before buying a home.
It may seem like a lot but the discipline in savings will go a long way with a bank and will get you a much lower interest rate when you do go to purchase. Besides getting a better interest rate, saving 20% of the downpayment will provide you with a real sense of how hard you worked to earn that cash and you will approach the home buying process a lot more carefully. It is always easy to spend the banks money but difficult to put yours on the line.
Just a suggestion.
Since your credit score is so low, I think that the easiest way to get into a property would be to let your father buy the property under his credit. Then you should write him a check each month for 1 yr. Being sure to keep copies of the cancelled checks and paying on time, sets up a senario for you to assume an FHA loan. He can put you on title to the property. You will need to work on getting your credit improved during that year. By
paying your father on time can help substantially. Give me a call and I will give you a road map to follow.