Best of Luck, Stephen Webber, 34 years of real estate
For First Time Home Buyers
Once you get things settled, get evidence of a zero balance, and send it to each of the 3 credit bureaus. Include your name and social security number in your cover letter. If you can get any of the creditors to give you a letter stating that the collection or whatever was filed in error if you pay in full, that would be great. Send that letter to the credit bureaus as well, and having the item removed will be better than showing it as paid.
Good luck, and within time you can buy that house you want, and feel comfortable knowing that you will not lose it because you can't pay for it.
The question for you is what is "horrible"? These days most lenders have pushed required credit scores and other credit report items up very high, beyond the reach of many people. But you can still find lenders who are willing to go with scores as low as 580. (In the 'good ole days' this number was 510.) Most lenders want 620 or higher, and this means of the 3 scores, not the lowest or the highest, but the middle score.
Some people have criticized Don's comments to you, but there is a point in all that. Most people get in trouble for not budgeting (trying to plan on what they spend money on limited by their income). Following a budget takes a certain amount of self-discipline.
Lenders love people who don't miss payments and don't have creditors chasing them, but their memories are typically only two years long. If you can get all your bills paid on time (doesn't mean you have to pay them off - just pay at least what they ask), then in a couple of years your credit score will be well above the qualifying levels. Can it be done in 2-3 months? Maybe, depending on the types of derogatories on your credit report.
Don't be disheartened. Talk to a loan officer and see what can be done and how long it will take. We can't know because we haven't see your report, and we're just guessing.
I'm pretty sure some "great loan officer" out there could find the money for you. But they wouldn't be doing you any favors. Just figuring out another way to make money at your expense,
I don't blame you for asking the question. But I think you deserve better answers than some have given you.
Look: Your "horrible" and "very bad" credit is a symptom of a problem, not the problem itself. It says that in the past you didn't prudently management your finances. Maybe that's changed. If so, great. But prove to yourselves (as well as others) that you do know how to manage your money. Work on it. Your credit score will rise. But it may take awhile.
I said your bad credit is a symptom, not the problem. Here's an analogy: Suppose you don't pay your electric bills, and the utility cuts off your electricity. In the evening, it gets dark outside . . . and inside with no lights. You light candles and tell your husband that the problem is that the lights aren't working. The darkness (and inoperable lights) are just a symptom. The real problem is that the bill wasn't paid and your electricity was cut off. To solve the problem, you can't just light candles. You have to pay the bill.
Same with your situation. The poor credit is just the symptom--the outcome--of the real problem. You have to address the real problem. Some clever loan officer isn't the solution.
I totally agree with Don Groff. Now is the time to build an experienced team that will guide you and your husband thru the homebuying process. Your next step would be to obtain a copy of your credit report so you know exactly where you stand. I recommend you speak with a few lenders and decide who you want to work with. Only then should you give permission to have your credit report pulled. Your lender will then be able to make specific recommendations. Do not be in a rush; credit repair takes time. The most important decision you will need to make is who is on your team. Trust your gut on this one. In this market, we all have access to the same tools. The difference is how skilled we are at using the tools.
Best of luck. Stay focused on your goal.
Be well, Mark.
REALTOR | Mortgage Broker
Keller Williams Realty | 360 Lending Group
Yes some loan agent will be able to get you a loan, the standards are very tough now-a-days.
Check with. http://Www.amerisave.com. Or http://www.penfed.org
Hope this helps.
1) Clean up your credit BASED on what is on your credit files can take approx. 60 - 90 days they apply for a loan.
2) Save you time have either one of you worked for 2 years or more at the current jobs. If NO you more than likely declined for a loan all lenders require at least two years employment.
3) Lenders will take the income on person who is applying for a loan.
4) Do you have anyone who can purchase the home for you till you turn your credit issues are resolved.
5) Lease property clean credit save for down payment then purchase.
DIRECT LINK HOME BUYING:
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
1. Those that help without judging.
2. The judgmental & arrogant.
Actually, Tasha, you will find many more types of "professionals" here than the 2 Tom listed.
No one was "judging" you Tasha.
Advising someone who states they have "horrible credit" to wait before buying, and to improve their credit scores is hardly being arrogant!
I call it being prudent..... but to each his own.
Neither Don nor I have any pony in this race................but even if you could be a potential client of mine, I'd still tell you to get your finances in order before looking to buy a home.
Otherwise, you might find yourself on thin financial ice.
Just because someone out there might say they get you a loan, doesn't mean you should .
Your priority should be improving your credit, and making sure you don't get in that position again.
I don't know specifically what you mean by "very bad" credit, but anything below the mid 600's needs to be addressed.
Come up with a plan - speak to a financial advisor - and get those numbers up. Only then should you look to take on the financial responsibility of home ownership.
ps Oh, and to answer your question - you would need to be on the mortgage in order to include your income, so yes, your poor credit would come into play....
2nd answer would be private lending where they make up their own individual guidelines, this would be the route to go under your circumstances. Example, I work with a private investor that buys a home in the area that you would like, renovates the house to your spefications and then they seller finance the property to you. The rates range from 6.5%-7.5% and the down payment is 3% and the closing costs are less than $1000.
3rd concern is your husband is a barber, they usually receive allot of cash or cash tips so therefore he would be considered self employed, 2 years tax returns would be needed and it would all depend upon his schedule C and how much income he is claiming. UNLESS he is on a W2 and is under a salary as a barber, which is rare.
4th would be to address the credit issues you have and take corrective measures to get back on track. That would be the reasonable and responsible thing to do.
There are some great Loan Officers out there and I know one that has programs for credit challenged individuals. If you'd like to call me, I can refer you to those that are VERY good at what they do and can possibly help you!
Best thing to do is get with a loan officer. My guess is that if you have a large income, a good loan officer might be able to clean up your credit quickly. Credit scores are largely based on paying on time and access to credit, so it might just be a matter of paying off some credit, disputing invalid items, paying off small items, that can improve your score.
Let me know if you need a referral to a great lender.
For you to use YOUR income, you would have to be on the loan.
Here is a free resource for you to start cleaning up the credit.
If you would like more information, please call me or email me: (214) 293-1831 or SarahMontesKW@gmail.com