Banks are traditional lending sources. When a bank will not lend money you can turn to non-traditional sources such as Uncle Joe, the Buy Here - Pay Here shop, and yep, all those pay day lenders. Non - traditional money sources are more, much more expensive than credit unions and banks. Using them because no one else will lend money is often a trap that is extremely hard to escape.
What you must do is build your credit the very same way everyone else did, with discipline and patience.
#1. Set up a budget... a real budget that includes savings.
#2. Stay put for several months to establish an employment record and save a few bucks.
#3. If you have demonstrated you can live within a budget for several months, now you can apply for a charge card. Never leave more than a $60 balance at the end of the month.
#4. In six or eight months you may be able to sign a lease for an apartment.
#5 In two years you will have saved sufficient money, $5,000, for a down payment on a home of your own.
#6, Call your nearest real estate professional.
Don't entertain the idea there are short cuts. The process is as much about creating economic maturity as it is getting money. Have a plan, stick to it and you will reap the benefits.
Please feel free to contact me at your convenience and I will be more than happy to help you.
Elliott R. Oliva
Primary Residential Mortgage
It's also relatively easy to build credit. Get a few credit cards, for instance (Visa or MasterCard), and use them carefully. You'll take a small credit hit at first, but buying some items (thing you'd have bought anyway), and then paying them off over a period of 2-3 months will help. If necessary, start with a secured card. That's where you put $x (like $500) into an account that you can't touch. You then receive a credit card for that amount. The card is secured because if you don't pay the credit card amount, the lender can seize the money you've put into an account. Nevertheless, that'll help build your credit. The loan officer or mortgage broker can give you lots of other tips, too.
So what do you do until you've built up (or restored) your credit? Two basic options: First, rent. Even landlords and apartment complexes will want some sort of credit history. But it's generally less strict than if you were buying. Private landlords (individuals renting out a home or condo) often are more flexibile than apartment complexes.
Second option (if you really, really want to buy): Consider a lease-option. That's nicely suited for you--it lets you control a home and yet gives you time to build up your credit. I wrote a blog on how to find lease-options: http://bit.ly/findaleaseoption. Please note, though: Have a real estate lawyer advise you on how to protect yourself. Some (many?) agents here on Trulia don't like lease-options, and one reason is that if they're not properly constructed you can lose out. (Reminds me: I have to write a blog on that subject--how to protect yourself!) And there are plenty of properties around Winchester available for lease-options.
So: Consult with a lender to really determine what your credit and your fiance's credit is. Get advice on how to improve it. If necessary, consider renting for a year or two while strengthening your credit. If you're really eager to buy today, consider a lease-option, but make sure you get good legal advice on how to protect yourself.
Hope that helps.