Home Buying in 44646>Question Details

Denise, Home Buyer in Massillon, OH

I have a credit score of approximately 530-540. I am interested in buying the home that we rent. Current rent

Asked by Denise, Massillon, OH Sun Jun 22, 2008

is 1250. I have approximately 20-25K as a down payment. I also filed bankruptcy about 2 years ago? Is there any hope for me?

Help the community by answering this question:


Sure. Lots of hope.

The advice below is good: Find a good, reputable mortgage broker you can work with. Determine how best to raise your credit score and to qualify for a decent loan. And determine a feasible time-line. One year? Two years?

Beyond that, though, is the actual strategy of buying the home that you currently rent. Since you aren't going to be able to approach the owner and say: "Mr. Owner. I'd like to buy the home we're renting. Can we settle in 60 days?" you should have a strategy to get agreement now, and to purchase when your credit allows you to.

A lease-purchase would be one workable strategy. After all, the owner is already leasing to you. You just have to reach an agreement that you will be able to buy the property from him/her within a specified amount of time for a specified amount of money.

A lease-option would be another strategy. An option wouldn't bind you to purchasing the property; it would give you the right, but not the obligation. However, since you live there and you're happy with the house, and appear to have thought things through, a lease-purchase might be nearly as good as a lease-option.

A contract for deed would be another strategy and, while I'm not terribly enthusiastic about them, they're very popular in certain parts of the country.

The same end result can be accomplished with a land trust. More info at http://www.landtrust.net. Basically, the owner would create a land trust and move his property into it. You'd be named the resident beneficiary of the trust. At a point in the future, the property would be brought out of the trust, and you could purchase it. A land trust is safer than a lease-option or even a lease-purchase. Most of the paperwork is done up front, and the property would also be protected against liens, suits, and judgments filed against the owner.

Finally, the owner could simply sell the property to you and take back financing himself. Rather than you getting financing from a bank, you'd make your payment to the owner every month. That's something he might be willing to do now, even with your low credit score.

So, lots of options. Lots of hope.

Good luck.
2 votes Thank Flag Link Mon Jun 23, 2008
Don Tepper, Real Estate Pro in Burke, VA
I second Don's advice. Since you already have a--hopefully good--rental history with your landlord, seller financing might be the way to go for you. A lease-option is probably your best option, since it will give you some more time to work on improving your credit. After having raised your credit score, and after having established a good history of making the mortgage payments, you could eventually refinance with a conventional lender to lower your interest rate.
1 vote Thank Flag Link Wed Mar 18, 2009
Not at this time. Get a secure credit card and start rebuilding your credit. Read some credit building articles and take action to be able to find the home of your dreams
0 votes Thank Flag Link Tue Mar 5, 2013

You are going to find it likely impossible to find financing at this time unless you improve your scores quite a bit. Pay off collections or debt and continue paying your bills on time for the next six months. At that point you should be in a better position to qualify for a mortgage. Scores below 600 are finding difficulty in getting financed.
0 votes Thank Flag Link Wed Mar 18, 2009
Hope is here!! My company is one of the nation's largest FHA lenders and we will do loans down to 500 credit scores on refinances and 531 on purchases. I can almost guarantee you that there is very few if any lenders at all doing these loans right now. We are a direct Ginnie Mae lender and are making it happen. If you are dealing with a broker, switch to a direct lender because there isn't a bank they can put you through that will close these loans. I know, because I was a broker-owner for 5 years. If you are below these scores, we can create an automated report for you on what exactly you need to do to give yourself the few points you need. I have been in the business for ten years and there is a reason why I am with this lender. You can call me at 888-536-3001, ext. 1540 or email me at jjohnson@lendamerica.com. Talk to you soon!
0 votes Thank Flag Link Tue Mar 17, 2009
Hello Denise,
I know you have been given plenty of assurance that you are in a situation that can lead to homeownership. If you are interested in working with someone in your backyard, please feel free to call. I am a Perry township resident and a licensed loan officer. Feel free to check out our Web site as you shop around for best situation for you and your family. You can reach me at 330-705-8564.
0 votes Thank Flag Link Sat Aug 2, 2008
call me....bob mcclure-mortgage now-farmington, michigan (248) 806-0366 14 yrs. experience.i am licensed in ohio......
0 votes Thank Flag Link Thu Jul 24, 2008
Hi Denise,
Best bet you can make now is to get with a REPUTABLE, local mortgage broker who can assist you in putting your credit rating in order. There are enough good people who can help you for free that you may want to explore these avenues fully before you get involved with one of these Credit repair for hire firms.
If you would like call me or e-mail me through my website at http://www.CallRealtorJohn.com for the names of some people who may be able to assist you.
0 votes Thank Flag Link Mon Jun 23, 2008
Well, I can say that the subprime (lower credit score) market is pretty well gone, and the bankruptcy thing is not really helping either. If you are VA eligible, that is the BEST bet you have for a loan, because there is no minimum credit score needed. If not VA elegible, then look at FHA as a solution - they do not have a minimum credit score either, but will look at the bnakruptcy - you may have to write a pretty detailed letter of explanantion for that. Also, some banks have minimum credit scores, even though FHA does not.

It can be tricky, so get with a loan officer that you know is trustworthy, not one that advertises the best deal always as a bait and switch tactic. You can always buy the home on a lease purchase while you are cleaning up your credit if you want, that way, you are putting money toward the home. If you need help with that, let me know and I will refer you to a good agent in your area that can help you with that.

Also, I have some tips on repairing your credite if you want, so let me know and I will email it to you. my email address is sold@johnyouker.com

Hope this helps!
Web Reference: http://www.SWOhioRealty.com
0 votes Thank Flag Link Sun Jun 22, 2008
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