I'd think about some of these points.
â€¢Get a copy of your credit report and correct any errors
â€¢If your credit score is below 650, I'd look for credit repair companies
â€¢Reduce your consumer debt - pay down credit card balances.
oPay off the debt with the highest interest rate first.
â€¢Determine how much you can afford to pay for a home. Decide how much you are willing to spend for a home.
â€¢Can you afford the down payment (FHA 3.5%, conventional 5-20%)? Donâ€™t forget closing costs, moving costs, and having a small cash reserve for emergencies.
â€¢Get familiar with basic mortgage terms
â€¢Shop around local and national banks for best rates and programs.
â€¢Get pre-qualified for a mortgage loan
We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.
It is unlikely you could be approved for mortgage financing with that credit score at this time.
Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.
First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.
Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.
I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.
Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.
The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.
The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.
*If you thought my answer was helpful, please give me a â€œThumbs Upâ€ or â€œBest Answer.â€ Thanks!
Your best bet is to call a mortgage lender and get pre-qualified for a loan. Based on your income, work history and credit history, the lender will tell you if you can be approved, and for what amount, rate, terms, etc.. If not approved at this time, the loan officer should be able to review your information and help you develop a strategy and plan of action to get you in a position to be approved as soon as possible.
I would suggest you contact Ed Dubinsky at Absolute Home Loans 215-808-5353.
Good luck with everything. Once you are approved and looking for a professional Realtor, please feel free to call me. I'd be happy to assist you in finding a great house and negotiating a good deal for you. In the meantime, if you have any other real estate related questions, please feel free to call me directly. Have a great day.
All the best,
REALTOR, Property Manager
YOur Real Estate Resource For Life
FHA has a low down payment requirement of 3.5% down. FHA can be financed with a 620 Credit Score. I work with experienced Loan Officers!
Please contact me for your residential PA real estate questions, buying, and selling needs.
Liberty Bell Real Estate
Direct Phone: 215-237-4147
We can then help you find your new home, make an offer, put the deal together.
Please feel free to contact me as soon as you are available.
Dmytro V. Bova
Realty Mark - The Diamond Group-Real Estate Sales
Main Line Investors Group - Property Management
700 E. Township Line Road, Suite 100
Havertown, PA 19083
Tel: 610-449-1919 x.223
Licensed In Pennsylvania
If you already know that your credit is not good, it may be beneficial for you to speak with a credit repair company on fixing what is currently broken. The call is free, and it will allow you to assess the problem.
I can recommend someone for you if you need a referral.
Timothy M. Garrity | REALTORÂ® & Consultant
U S Spaces, Inc. | #RS314897
215-829-8850 x267 - Office
267-879-2716 - Mobile
Obtaining a mortgage is dependant upon more than just a good credit score, mortgage lenders also consider how much debt your carry, what you earn and how long you have been working & at your current position.
It is easier for buyers if they have a mid 600's score, but I have an excellent mortgage broker / credit consultant that gets my buyers where they need to be. Different loans have different requirements.
You need a buyers agent. It does not cost the buyer anything to have their own agent and it is a priceless advantage while navigating the home buying process. A buyers agent will repreresent your interests.
Please feel free to contact me privately if you need an agent or addtional answers.
Coldwell Banker Preferred