Home Buying in Minneapolis>Question Details

Siobhan, Home Buyer in Minneapolis, MN

I have a low credit score, 540, due to job loss a few years ago. I now have a new, better paying job earning 130k- sick of renting but cant buy -help!

Asked by Siobhan, Minneapolis, MN Thu Feb 16, 2012

Help the community by answering this question:


I have some GREAT news for you!! I am currently working with two buyers that basically asked the same question you did on this venue. Both were turned down and told they had to wait. But they contacted me and we got them both a house! Actually, one just closed, the other I am working on and it will go soon. And I would be glad to give you references, too.

But the bottom line is this: I hear your pain.....but you CAN buy.

Please feel free to contact me and we can talk about your options and a plan. I cost you absolutely nothing, so you may as well call and get expert advice. There is lots of good advice on here from some great agents. But I can assure you that I have lots of experience in this area and will be able to guide you where you need to get.

Just click on my website below and either send me an email or give me a call. I look forward to helping you.

Have a great day,

1 vote Thank Flag Link Thu Feb 16, 2012
Mark is correct, and I'm glad he pointed out other specific programs, but please note that I said "GENERALLY, you need a score of 640, but you have a couple of options..."

He's right though. There are a lot of different lenders with different programs. You should talk with more than one. But (generally) the lower your credit score, the higher your interest rate.
0 votes Thank Flag Link Tue Mar 27, 2012
I just wanted to counter something here, with no disrespect for Stephanie. YOu don't need a score of 640. Most of the lenders do require 640. There are a couple that go down to 620. My loan officer here at Edina Realty mortgage can, on a standard FHA loan, go 600. That is all that is necessary. However, there are two other options with the FHA program that may appeal to you. Based on you having a high income, and a couple other factors, we also have 2 other FHA options where you can get a loan if you are at 580 or 560. You just need to put a few more bucks down as down payment. That is it. So please don't be scared off by anyone telling you that you need a score of 620 or 640, because that is not true.

0 votes Thank Flag Link Tue Mar 27, 2012
Generally you need a score of 640 to buy, but you have a couple of options including a Contract for Deed. There may also be a way for you to raise your score. There are many places to get help repairing your credit, but some of them are less than honest. One place to start is the Minnesota Housing Finance agency at http://www.mnhousing.gov. or call 651-296-8215.

Check them out. If your income is as high as you indicate and your debt is not too bad, you may qualify for a home. Call me and I'll find out if you can buy now or if you'll need to wait. You may have more options than you think.

Stephanie Fox
Coldwell Banker Burnet
0 votes Thank Flag Link Mon Mar 26, 2012
Wells Fargo Home Mortgage offers free credit counseling. I would recommend reaching out to a loan office there. If you need a referral I have one for you.

Kris Lindahl, CRS, CDPE, SFR,
0 votes Thank Flag Link Mon Mar 26, 2012

Just saw that you replied late last night and thanked everyone. That is very kind of you, especially because many times the original person asking the question never replies back and we all wonder if they are "listening". You sound much happier and that is good. You should be. Because as you stated, this is not as negative as you presumed and I am proud of you for listening and changing your heart.

I am a bit concerned with the amount of advice you are getting saying it would be a good option to wait and save your money, especially with the market conditions where they are at right now. I don't have the time to get deep on this subject, but when you compare a renting option to a buying option, the buying far outweighs the renting, and in a huge way. That is, of course, IF you can buy. That takes credit and cash. But that is something I can explain in detail and use some software to show you the difference. It would blow your mind how much more advantageous it is to be the buyer and not the renter.

And I also see warnings about credit repair and a lot of suggestions. Some of these are right on. And I have a company that is number one in the nation for what they do and I will gladly explain to you two of their programs and believe that one of these will fit you perfectly. They are not only inexpensive, but you get a coach and some huge results. I started sending my buyers to them a couple years ago and have seen the greatest results I have ever seen in my entire career, and for less than 1/3 the price of the others. But I would never recommend a free program, and it will all come down to the personal interaction, the quality of what they offer, and the old addage that "you get what you pay for".

I hope to hear from you soon. You are on the right track, Jessica!


PS: Thanks for the thumbs up on my previous post...whoever you are!
0 votes Thank Flag Link Fri Feb 17, 2012
Paying rent isn’t throwing away money, it puts a roof over your head. Be careful about credit repair, make sure you do it legally, do not dispute negative information if it is accurate, that is a federal offence, more info on the link below. My blog also covers the dangers of rent-to-own and leas options. Hope my comments keep you out of harm’s way, good luck,
0 votes Thank Flag Link Fri Feb 17, 2012

Here is a program that you can use for free to get your credit repair going in the right direction. Simply follow the videos and do what they say. This also contains a dashboard to watch your score improve.

As other have said a contract for deed is also a great option.

Have a great day!

0 votes Thank Flag Link Fri Feb 17, 2012
When it comes to helping clients purchase a home with some past credit dings you will want to work with a experienced loan officer who is proficient in the loan process as to what really impacts the credit ratings. Sometimes credit can be increased 100 points or more just by doing some simple corrections to payment history, balances owing, and past due amounts. This may take a couple of months to get cleared up but it is possible. I have seen Ryan Schilling, a Sr Loan Officer with Mortgages Unlimited (and credit wizard), do this with many clients. Email him at rschilling@muihomeloans.com and he'll take great care of you!
Web Reference: http://www.eliasjohnson.com
0 votes Thank Flag Link Thu Feb 16, 2012
Why not rent cheap and save up that fantastic income of yours and pay cash for a place. Think of how great life would be if you didn't have a housing payment every month.

Cameron Piper
Coldwell Banker Burnet
licensed MN Real Estate Broker
Web Reference: http://www.CamPiper.com
0 votes Thank Flag Link Thu Feb 16, 2012
Thank you all so so much for replying to my question. I guess my situation is not so hopeless after all, but being stuck paying too much rent for too small a space and feeling helpless is horrible! I really appreciate all the suggestions and advice and I will be contacting some of you soon, - I need all the help I can get!!
thanks again, Jessica
0 votes Thank Flag Link Thu Feb 16, 2012
Jessica, I know of a program that is not Credit Based and requires No Down Payment. Contact me for more information.

Ron Jensrud
Consumer Advocate
Buyers Real Estate Group, Inc.
Web Reference: http://www.NeedaNewHome.com
0 votes Thank Flag Link Thu Feb 16, 2012
Jessica, contact me at sam@loanonahome.com I can help you look at your credit and help you improve it over time. I am a mortgage broker in Minnetonka MN and Work for Alerus Financial the only bank in the area that has a 5 star rating
0 votes Thank Flag Link Thu Feb 16, 2012
Hi Jessica,
My opinion would be that you definitely contact a loan officer to obtain their recommendations for improving upon your credit situation so you know what the best steps will be to be able to obtain mortgage financing down the road. I worked with credit for many years, and although things always are changing, there are great ways to improve your score with a few tricks of the trade. A good loan officer will be able to point you in the right directions as far as what to do and not to do when trying to build credit. If you are looking to take advantage of the current market and low home prices, and if you have a down payment, contract-for-deeds are a great way to purchase a home now. You will need at least 10% down to be a buyer in this arena. If you do not have a down payment, you may consider a rent-to-own which is a similar concept; however, you lease a home for an extended time where a portion of your monthly rent is saved by the landlord toward a down payment when you do purchase the home. Starting to get your credit on track now though is the best solution to being able to refinance off a contract for deed in 3-5 years, or obtain financing for a purchase off a rent-to-own. I work with a great loan officer who knows her stuff if you would like contact info, and/or if you would like me to send you contract-for-deed options feel free to contact me and let me know what price range, area, type of home, amenities, etc. you are looking for. Good luck in your home search and I would be more than happy to help you!
Web Reference: http://www.TAGRealty.net
0 votes Thank Flag Link Thu Feb 16, 2012
Yup go rent-to-own for sure and make sure you get an agent that understands these transactions. Although honestly 540 can get jumped up to 620 pretty quick if you have the right team in place. I would love to earn your business if possible all you have to do is contact me directly through Trulia.

Good Luck!
0 votes Thank Flag Link Thu Feb 16, 2012
Yes you can. Maybe not today, but in the very near future if you go to work on your credit.
Most of us have no understanding how credit works, and think that it repairs itself over time.
Fat chance, it doesn't. A number of my clients are working with Joe McGlynn of United Credit Consultants in Burnsville. He teaches how credit works, what's important, exactly what to do, and works with you for an entire year to make sure that you are on track, and stay on track.
We all have to think differently about our money, and making the system work for us. There are rules of the game, and if we don't know them, we can't use them.
0 votes Thank Flag Link Thu Feb 16, 2012
Actually, there is an alternative with no down payment, no closing costs, no mortgage insurance and a fixed rate 30 year mortgage that is guaranteed to be less than prime. I know that this is "too good to be true" but it is a legitimate program and funded by one of the big lenders. (My title company has closed a number of deals with this company.) It's huge in other cities and just coming to the TC. If you'd like more info, call or check my website for my email.

Joe Stradcutter
High Pointe Realty
Web Reference: http://ShortSaleMNPro.com
0 votes Thank Flag Link Thu Feb 16, 2012
Save, jessica, save, save...you could probably do a rent-to-own or buy ob a C/D with a down payment. Than, you will have a seasoned record, and you could turn your C/D into a mortgage or sell and buy another place before you C/D runs its course. You should also contact me and I will help you set up a credit repair plan. Beware of the debt copnsolidators. Often these cost quite a bit and creditors may treat these plans as if they were bankruptcies. I can show you how to repair your credit within 12-18 months, doing it yourself! Call or email. Liz, 612-986-4105
0 votes Thank Flag Link Thu Feb 16, 2012
Unfortunately, you'll need to get your credit score up a bit to buy traditionally. However, you could try a Contract for Deed in which the seller acts as your lender, allowing you to make payments directly. Usually, Contract for Deeds are written for a limited time – say, three to five years – allowing you to use that time to raise your credit rating. When your Contract for Deed ends, you would get a regular mortgage loan.

Both you and the seller takes chances in this situation. If you miss even one payment, you don't have the protections against foreclosure you'd have with a regular mortgage. The seller could take back the home and keep all the money you've paid. But, that would really be no worse than renting. The advantage for a seller is that they get an income stream and they don't have to try to sell their home during this buyer's market.

It's best when the seller owns the home free and clear or has almost paid off their mortgage. Banks won't use this kind or arrangement, so the houses you would buy would be limited, but you could still find something that would meet your needs in the Twin Cities.

Let me know if you have any additional questions. I'd love to help you out.

Stephanie Fox
Coldwell Banker Burnet
0 votes Thank Flag Link Thu Feb 16, 2012
Hello Jessica

I would try meeting with a loan offer to discuss your options...it very well may take 6-12 months to work through your credit score issues...but a qualified lender may be able to help you get this done a lot sooner.
0 votes Thank Flag Link Thu Feb 16, 2012
You may need some credit repair before you will qualify for a home loan. If you would like I can send you a good contact for that, they will do a free consultation.

Kirk Duckwall
The Duckwall Team of Realtors
Edina Realty
Web Reference: http://www.DuckwallTeam.com
0 votes Thank Flag Link Thu Feb 16, 2012
Hello Jessica,
There are opportunities for a Contract for Deed (Rent to own) out there?
What about those?
0 votes Thank Flag Link Thu Feb 16, 2012
Jessica, there are a few things that may be holding you back currently from being qualified but your best bet is to in touch a great loan officer. A loan officer can take a look at your exact picture and show you the steps necessary to get your credit good and other factors that may be holding you back. Sounds like you have a huge piece of the puzzle with your great job situation now its time to get the other things in line. Some negative credit items can be overlooked with good explanations. Without know more specific information about you this would be the best advice I could give.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Thu Feb 16, 2012
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