Home Buying in 30339>Question Details

Lynn, Other/Just Looking in Clear Lake, Houston,...

I have a low credit score (low 500's). I own a new car, land, mobile home. I'm a teacher, 20yrs. Will there ever be hope for me to get a?

Asked by Lynn, Clear Lake, Houston, TX Tue Jan 25, 2011

home loan? The damage is from 5.5 years ago. I really want to find a small house but I just keep thinking there is no use in even making an appt with a loan officer. I have another year and half before my credit score might change. I'm already working towards a better credit score but I have a great opportunity to sell my mobile home now.

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Fred Yancy’s answer
Credit scores, along with your overall income and debt, are big factors in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:

1.Check for and correct any errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2.Pay down credit card bills. If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.

3.Don’t charge your credit cards to the maximum limit.

4.Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5.Don’t order items for your new home on credit — such as appliances and furniture — until after the loan is approved. The amounts will add to your debt.

6.Don’t open new credit card accounts before applying for a mortgage. Too much available credit can lower your score.

7.Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8.Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.
0 votes Thank Flag Link Mon Apr 23, 2012
FHA allows scores down to 500 with 10% down. Wells Fargo is currently doing this loan but they are scrutinizing the loans for the "best" ones out there.

I can do mobile homes but you'll need 640 scores.

I'd recommend Crednology to manage your credit report. They coach you on how to increase your scores and generally it takes about 60 to 90 days (that's the time the bureaus take to update erroneous accounts on the report).

I put the link below or contact Gail Simmons: 706-623-0580 x 7003 or gsimmons@crednology.com
Web Reference: http://www.crednology.com
0 votes Thank Flag Link Thu Feb 17, 2011
Check out the Teacher Next-Door Program. It is a federally funded program for teachers that helps them aquirfe property. ask your lender adn your Realtor if they know of it. If they don't ask them to do some research on your behalf or get a new Realtor and loan officer. It may be doable for you but you have some work to do
Good Luck!
Carole & Greg
0 votes Thank Flag Link Mon Jan 31, 2011

Lynel Adams is a long time friend and has given you good advice. My advice is to sell the mobile home if you have a FULLY QUALIFIED BUYER! (Cash is best) That will get that monkey off your back and should improve you debt-ration and score. Even if you need to rent for a brief time, it is best as you are not staying in rut but moving forward with your life and goals. I would recommend that you let Lynel take a look at things and call me if you have real estate questions. I work on a no-hassle basis.

Ken Guillen, Associate Broker, Certified REO Specialist
Casey and Associates Realty
0 votes Thank Flag Link Tue Jan 25, 2011
Dear Lynn:

I want to say yoru doing good! When you state, own car, land, MH, is that own free and clear? If so double Kudos. 5.5 Years ago is a long time ago, and if you have been making measures to work on those issues, that is great, the fruits should come forth. A couple of things to think about that will increase your score:

1. If you make settlement arrangements and it is PIF, did ALL the bureaus update the credit yet?

2. What is the "high credit limit" vs the balance you have on some of the open credit?

If you have the opportunity to sell a MH and if you "owe" on it, and you sell and that balance becomes PIF, that will be a great asset to your score as well. Now a days, the lenders/investors are far and few inbetween that lend on a MH now a days. So, if you have someone that will purchase it, I think it would be a good thing. My opinion of course. The past 18 years of mortgage originating, I have helped folks with MH loans for years..Now I am hard presswed to find a investor that will allow for a MH.

Thank you for the opportunity to answer, if I may assist you, please contact me.
Lynel Adams/Sr. Mortgage Consultant/Community Capital Bank
0 votes Thank Flag Link Tue Jan 25, 2011
If your current score is low 500's, you need to get that to mid to 600 range. Get the problems holding your score down resolved as soon as possible.

FHA requires 580 or higher for maximum financing, but very unlikely any lender will go that low.
0 votes Thank Flag Link Tue Jan 25, 2011
Hi Lynn,

The answer is absolutely yes. If your credit issues are from 5.5 years ago and you have kept everything on-time since you should definitely see improvement in your credit score. Be sure that the items you have purchased (car, land, mobile home) aren't pushing you over acceptable income to debt ratios and you should be on track to buy in the near future.
0 votes Thank Flag Link Tue Jan 25, 2011
Lynn you have been given some excellent answers so far. And Gerard mentioned something that was going through my mind. Scores low from 5.5 years ago. I'd love to hear more details about that.

And also to add that I have seen people get their credits raised in as little as 6-8 months. You really need to meet with a lender. Before you do that, ask everyone you know who has purchased a home and then start interviewing the lenders they refer to you. There are some who specialize in getting you back on track and actually enjoy that part of their profession. It is important, though, that it is someone who is experienced in doing this.

I don't know how hard it is to sell mobile homes by you, but in my neck of the woods, it is difficult. If your plan is to move ahead with this and you have a solid buyer, the previous answer by Stacy is a good one. Many of the good deals that are out there will not want to wait for you to sell your mobile (home sale contingency). So selling now and renting while you repair your credit may be the right choice. But, again, before moving forward, I strongly suggest finding a lender and asking their advice.
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Tue Jan 25, 2011

I agree with other posts, you should speak with a loan officer on how to repair your credit. Improving credit often involves steps that appear to be counter intuitive. For example, if you have a collection that is several years old, paying it off now may actually hurt your credit.

It should not take 18 months to improve your credit enough to be able to buy a home. Feel free to call me and I will see what can be done to help you improve your credit profile.

Tim Brown
Academy Residential Mortgage
678 467-9959
0 votes Thank Flag Link Tue Jan 25, 2011
Where there's a will, there's a way....Sounds like you have good stable income, so you just need help/guidance working on the credit part.......You could have your scores up to an acceptable level if you do the right things over a 12 month period....It can happen, but it is up to you! There are lenders here on this site that can guide you....
0 votes Thank Flag Link Tue Jan 25, 2011
Sit down with a loan officer who has access to a program that can spell out step by step what you need to do to improve your credit score. It sounds like you're taking steps but I would think it would nice to have validation from a lender.

If you can sell your mobile home, I would think that would help with a down payment.

Good Luck!
Stacy Carter
Associate Broker
Better Homes & Gardens Real Estate Metro Brokers
0 votes Thank Flag Link Tue Jan 25, 2011
There is hope but repairing credit does take time. If you can sell your home now, consider selling it and become a renter for a while. This is what many are doing right now who are in similar financial situations.
I would be happy to take a look at you options with you.

Best Regards,
Strom Thurman
0 votes Thank Flag Link Tue Jan 25, 2011
Lynn -

Although it may seem contraintuitive - a loan officer is the first person you need to see. He can pull credit and determine what items need to be paid off or paid down to get your credit scores back on track.

Scores in the 500's after 5.5 years means there are still open collections or judgements. You will have to pay these off or better yet - negotiate a reduced settlement for these debts before you can get back on track.

If you put your mind to it - and really focus on getting paid up - you can probably be approved within 18 to 24 months.

Good Luck!

Gerry Dunn
Associate Broker
Serving Maryland, D.C. and Northern Virginia
0 votes Thank Flag Link Tue Jan 25, 2011
What can it hurt , to discuss your options with a good local lender who offers credit counciling as well ? Knowing where you stand and devising a plan going forward, sounds like a good idea to me.
0 votes Thank Flag Link Tue Jan 25, 2011
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