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.
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Yes, it is possible to get a loan with a 609 credit score, but there are other important variables that you would need to have a lender look at. Give Lou Ellen Scott with Primary Residential a call and she can help explain all your options. You can reach her at 704.408.6703. She is VERY helpful and can help you to understand your 100% financing options as well. You should not have to take a higher rate to use these options. Feel free to call me directly at 704.562.2071 and I am happy to help!
To see if you might qualify, you should read this Trulia Blog Can I get a Home or Am I Stuck Renting? We are working with lenders who are finding financing for clients who meet this criteria, who have a steady job and 580 middle credit score. While there are options for down payment assistance and we can often get the Seller to pay your closing costs, it is a good idea to have at least 3.5% of the purchase price in savings for emergencies and reserves. If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service. ... if you appreciate this answer, please give it a "thumbs up", or if this was the most helpful answer, please say thanks with a "best answer" click .
Or get out there and obtain some creative financing; you can get someone to cosign for you, get a non-conventional loan, portfolio loans or private lender.
You may also go on craigslist to find motivated sellers who are willing to do seller financing or rent to own options. Let me know if you need any assistance or clarification..
"Everyone has a right to own a Home"