Unfortunately, having a low credit score pretty much will keep you from getting a home loan from a direct lender. 580 is the lowest any of them will go, and that comes with high points and a bump up in the annual percentage rate you will pay for the next 30 years.
You are better off repairing your credit and then looking to purchase a home. I had one client that did this recently. They took about a year to fix their credit and it really paid off for them. We found them a great home, prices had gone down a bit from when they first started looking, and they got a 5% - 30 year fixed mortgage.
I specialize in the Torrance area. I would be happy to give you some information on the area and hook you up with a great lender who can give you some tips on how to clean up your credit. All of this at no cost. Then when you are really ready, we can go looking for that dream home.
And, don't worry about missing out on buying a home at a great price. With all the stuff in the news about another banner year in foreclosures, and with unemployment high (meaning there are fewer buyers out there) the chances are pretty good that prices will not go up significantly in the next 12 months. A little patience, and some hard work cleaning up your prior credit mistakes, will go a long way to helping you buy with total confidence and peace of mind. Feel free to contact me directly with any questions. Dare to Dream.
Shel-lee Davis, CDPE, SFR, QSC
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
Have you checked into possibly doing a Lease-to-Own type purchase? By their very nature, they allow people, such as yourself, who have stable jobs and income the time to work on their credit WHILE living in the house you're eventually trying to buy.
If you do decide to try buying this way, YOU MUST be diligent on working with a Credit Repair specialist right off the bat when you start the lease-to-own process. The credit repair specialist that works with me has had people increase their credit scores from 50-100 points in just 12 months.
A Lease Purchase is not for everyone, but done correctly with PROFESSIONALS who understand the entire process, it could open doors (no pun intended) to homeownership for you. It's just another avenue on which you may want to research and educate yourself.
If you're interested in working with my credit repair specialist, shoot me an email and i'll give you her contact information. It's about $350 to enter into the program (which I TYPICALLY WILL PAY for the tenant/buyers that come into and use our Leasing To Own Solutions program) and then about $65 per month (which they will pay). Or you can just talk to her to see if her program would be a fit for you.