Jess, see a non-profit credit counseling service. They can help you figure out how to improve your credit. Maybe you will end up with a 5 year plan. Pay off the highest interest rate cards first, then move on to the next highest interest rates. Live without credit. Pay cash for everything. SHop for used not new items. Goodwill and salvation army can save you lots of money.

Over time when you pay off your debt you will find that your fico scores improve. You may also find you have saved enough money to have a downpayment. Then you will be able to do what you want, buy a house.

The other thing is to look at your credit report. Dispute anything that is not correct. Maybe that would help. Either way, what you do today can help you to have a brighter tomorrow.

So as not to confuse anyone about the credits available to all buyers, please see this site. REALTORs are not tax advisors, but if we feel something may benefit our buyer, we are certainly going to share information. The entire country is advertising the benefits of these tax credits for a very, very important reason! Stay informed and always ask, ask, ask questions. It's our job to help find the answers!!!

As follow up to H3dude's posting, I would say this to you Jess - however you got in the position you are in, it is a good thing to put a stake in the ground, examine your situation and make positive changes. You will not be able to get a mortgage with poor credit, so you've got to get your financial house in order. So take stock and get yourself on a positive track.

Good luck to you!
Best,
Jeannie Feenick
"Unwavering Commitment to Service"
Search the MLS at http://www.feenick.com

Obviously life changing things can have a negative effect on your credit score. I'm talking about people who think it is ok when a bill collector (phone, tv, car, etc) to laugh because they keep calling, Meanwhile, the credit score is taking a hit.

I'm talking about people who can control their credit score, without life changing events taking place.

If the OP really wanted a real answer to the question, more information can be given to help in the exact situation.

There could be 100's of reasons why the credit is bad, positive or negative.

Also, I realize, as realtors, you guys really like to advertise the tax credits, etc. This sometimes leads people in the wrong direction. 50% of the population thinks they're getting $8,000 in cash back or $6,500, etc. It is a tax credit, meaning if you make $20,000 per year, you're going to be taxed from $12,000 instead of $20,000 and it results in a minimal return when considering buying a home.

My property taxes are $7,000 per year so that is a $7,000 tax credit, or reduction in taxable income at the end of the year.

The whole tax credit thing isn't what it was cracked up to be.

Hi Jess, as an update to my earlier post, and hopefully motivation to get your credit house in order so that you can buy - the extension and expansion of the Homebuyer Tax Credit received final sign off today! This gives you more time and I do hope that you will be in the position to buy and take advantage of the tax credit.

Good luck Jess!
Jeannie Feenick
"Unwavering Commitment to Service"
Search the MLS at http://www.feenick.com

Actually, I'd have to disagree with H3dude here, because I have met many people whose credit has been ruined through NO FAULT of their own. Divorce alone can destroy a person's credit, if a spiteful spouse decides to deliberately set out to wreck the other spouse's credit by running up credit card bills unknown to the other person (but still linked to their credit) and then eliberately allowing them to go into delinquency. A sudden devastating illness in a family can run up huge bills that put incredible strain on resources and can take a long time to pay off, and even a couple of late payments can impact credit scores.

That's why it's important to keep track of your credit score, and if there are problems, there are absolutely things you can do to repair it - but I don't think people should automatically assume that just because a person's credit score is bad, it follows that it's because they screwed up and didn't pay their bills!

Jess, in my office at Keller Williams Realty Elite we work with a couple of mortgage bankers, and they counsel people with credit issues all the time - crunch numbers, explain to them how to improve their credit and check in with them every month or so to see if they can help, and gradually help them work towards the point where they qualify for a mortgage. Feel free to contact me at my office at 484-334-7542 and I can put you in touch with one of them.

Take heart, Jess, and good luck!!

Unfortunately your credit score is a measure of how responsible you are. Due to the issues that have started the financial situation across america you're going to be subjected to higher standards among lenders.

The best thing to do is pay your bills on time and to avoid any bad marks on your credit.

Once you get your credit cleaned up people will line up to give you a mortgage. I recently sold my home and bought a new one and for me the mortgage was just a matter of signing the papers at closing, but I've been responsible with my credit.

Hey Jess,

You definitely do not want to give up. Our office actually has a lender that works closely w/people who have credit issues, and believe it or not, sometimes credit score is not as important as credit itself. More and more people do not have good credit and lenders that recognize this, work w/their clients to help them get things in order so that they can get loans! If you want to talk to this lender, call me, and I will make it happen!

Hi Jess, meant to also direct you to My Trulia Blog where I have a link to more info on the Tax Credit Extension - to update it further, looks like it sales through the Senate, now it is on to the House.

http://www.trulia.com/blog/jeanne_feenick_-_new_jersey/2009/…

Stay positive and focused!

Best,
Jeannie Feenick
"Unwavering Commitment to Service"
Find success at http://www.feenick.com

Hi Jess, you've gotten good answers so far - all encourage you to focus on the process of readying yourself for buying. Getting your credit in order and improving your credit score does take time so keep your eye on the prize and stay the course.

The home buying process - the search, negotation and successfully making it to closing also take time. Learn from the reactions of those you have interacted with thus far - agents that have been willing to talk to you, help you understand the process, and connect you to resources to guide your through this phase, and that show compassion for your situation, deserve your consideration when your credit situation is improved and you are ready to buy. Building a relationship of trust and confidence comes with experience, and you've likely have input based on agent reaction and responsiveness so far that you can factor in to your ultimate decision on who to work with - find yourself good resources - mortgage reps/credit repairs assistance and agent and stick with them.

Also, the likely extension of the Homebuyer Tax Credit is very good news for you - it looks like April will be the timeframe for you to be under contract in order to qualify, so use this as a target and motivator.


Good luck Jess,
Jeannie Feenick
"Unwavering Commitment to Service"
Find success at http://www.feenick.com

Hi Jess,

I agree with all the other comments here. If you do not qualify for a mortgage right now, that does not mean you won't later if you take the proper steps.

Credit repair is a process, it takes time and patience, please do not give up my friend. I recommend you use the free resources available to you on the internet.

I like Sean's, Samantha's and Valerie's answers; I'll expand a little on Valerie's answer from different perspective (as an investor [the seller]).

Jess, believe it or not, . . . some of us might be willing to give someone with less than perfect credit another chance. Yet, each investor has his/her own set of minimal criteria. I've worked with someone before who had a credit score barely above 500, and I know other investors who wouldn't dream of working with someone who has one less than 600.

I require all of my lease-option tenant/buyers, who have a credit score less than 600, to undergo credit counseling with an approved service provider. I also like to sit down with my tenant/buyer and the credit counselor to help map out a strategy that will raise that score minimally to 600, so that my tenant/buyer shouldn't have a problem obtaining new financing. I also like to periodically schedule follow up meetings to track the progress.

We all have a stake in the matter, and we all want to help my tenant/buyer to succeed. One never knows, . . . the person whom I help today might be the one who helps me tomorrow (perhaps by bringing me more business).

Anyway, Jess, keep the faith. Some of us look past one's credit report to see the rose blooming with slightly damaged petals.

Jess:

There are also possibilities that you should investigate with your real estate agent, whereby some sellers are willing to consider "lease purchase" terms or "seller financing". You would essentially have a contract with the seller, either with the seller holding the mortgage with you sending the payments to the seller monthly, or with you "leasing" the property for a couple of years from the seller with the contract written that you would obtain a mortgage after that time in order to purchase it from the seller (and obviously, the contract would be contingent on your obtaining the financing). Especially with lease purchase, you would be able to spend those couple of years rehabilitating your credit score in order to obtain your financing, while living in your chosen house.

I would absolutely sit down with an agent and see what's available in your price range with sellers that might consider lease purchase or seller financing.

Hi Jess,

Don't get discouraged. Repairing your credit does not happen overnight and may take months or a couple of years to get to the number that lenders are looking for. You have to stay motivated towards your ultimate goal of becoming a homeowner. You can start by attending credit counseling seminars in your area and pulling all three of your credit report to see what is on there and what you are able to dispute. The most important things are for you to set goals, a budget, and stay motivated.

Good Luck,

Samantha Weekes, Realtor.

Jess,

What are your questions? Shoot me an email at sean.dawes@lnf.com and Id be happy to talk.

No one should disregard you even if you are not ready now. Ill answer any questions you may have



Sean Dawes

Don't give up, Jess. If your score is too low for a mortgage, there are legitimate credit restoration programs. Stop into our office and we'll be glad to discuss them with you.