Best of Luck,
I think you meant well..., but there are some parts of your post that may not apply to folks here in Texas. First of all, you are in New York, and mortgage lending rules are not the same all across the country. The person who posted this question is right here in Fort Worth, and they want to know what applies to them -- not New Yorkers.
As a Realtor who has been helping people get loans to buy houses in Tarrant County for 33 years, I see many offers from lenders for people with credit FICO scores below 620. I just don't think it is smart business practice to tell someone they have "BAD credit." Sure, their score may be below the national average, but they are not bad people. They just need some financial counseling, and assistance to achieve the goals in their life.
And not all of us charge the customer a fee, or try to scam them out of some money when it won't help their situation. I will always help a customer who shows a sincere desire to improve their score in order to buy a house. There are many things that can be done to raise a person's credit score without spending a bunch of money. But it does take time, so it is important to get started right away!
Paying off a past debt rarely, if ever, improves one's credit score. It may make the creditor happy, but it does not change the fact that a payment was late or an account was charged off. Those issues still affect the formula for calculating the credit bureau's score. So it may be irresponsible to suggest that all a person has to do is pay off all their old debts. (You probably still couldn't get them a loan to buy a house.)
Most things from our past cannot be changed. What young people need to focus on is changing their bad habits, starting today, and moving forward toward new goals. Pay every bill ON TIME in the future. Establish new accounts and put some positive entries on your credit report. Set up a checking and a savings account. Get a secured VISA or Mastercard, if that's all you can get. Sit down with a financial counselor and learn some good habits of money management. Get references from your landlord showing you pay your rent EARLY every month. Make this a habit for the next year or two, and give the TIME factor a chance to raise your credit score.
Lenders are looking at everything you have done in the last two years. Make it a good record! Save up the cash that is going to be required for the down payment and closing costs. Put aside some reserves for an emergency fund. ACT like you are responsible before you ask somebody to give you a large loan.
And the best place to start is to sit down with an experienced Realtor in your area. Lay it all on the table, telling them your goals and your past mistakes. They can then get you the help you need, and soon you'll be on your way to owning your own home!
ULTRA Real Estate Services
We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.
It is unlikely you could be approved for mortgage financing with that credit score at this time.
Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.
First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.
Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.
I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.
Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.
The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.
The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.
*If you thought my answer was helpful, please give me a â€œThumbs Upâ€ or â€œBest Answer.â€ Thanks!
Call me and I'll get you together with a lender who can start the preapproval process for you.
That's really the first step in looking for a home to buy, then the fun part starts....shopping.
Most lenders are at 620 or the 640 threshold. Others go lower.
For 600+ scores the file will be under a bit more scrutiny, but it can be done.
(214) 763-4629 cell/text/nights/weekends(Really!!)
Lending all across the entire Great State of Texas!!
Search Dallas area MLS for FREE. No registration => http://www.ntreisinnovia.net/cgi-ntr/BR_login?0501134
Best of luck to you
The short answer is yes. However as others have pointed out, every situation is different. Without knowing all the circumstances, no one can say for sure. For example, if you have had a foreclosure or short sale within the last two years, that would exclude you from qualifying for a loan
Getting prequalified is the first step in the process. It is best to work together with a lender and a real estate agent. But, if either of them suggests that you do anything fraudulent, you need to run in the other direction.
If you would like to discuss your options please give me a call.
Keller Williams Realty
Some of the answers on here are just plain wrong. I appreciate what Lowell has said, and while it is true that he is a reputable lender, there are some cases where it is better to contact a Realtor FIRST, before you make out a loan application. If the buyer has no issues, then it is OK to talk to a loan officer first; but if you don't know what you are doing, you really need the advice of an experienced Realtor before you lay all your cards on the table with the lender.
For example, ...if you have an issue that needs covering up, then the loan officer is not going to be able to tell you how to do that, because he would be commiting fraud. ~Now I am NOT suggesting that Real Estate Agents will commit fraud just to help you buy a house, ...but there is more than one way to skin the cat!
First of all, you asked a question about a FICO score which is in a gray area. Some lenders will NOT approve a loan at 615, and some may be able to. But if you have credit issues, you probably also have other issues that need to be addressed. SInce I used to work for a company that did credit repair, I can show you how to raise your score. It may take some time, so call me early!
There may be other issues, such as cash available and income-to-debt ratios that need to be addressed. What about job verifications, and rental references? Do you have everything lined up except the FICO score? Do you have a copy of your own credit report? I can show you how to get one for free. (There is only one website approved by the federal government.) I can show you ways to "create" acceptable cash for the down payment. (A loan officer can't do this.) I can suggest ways for you to increase your income-to-debt ratio --- WITHOUT paying off a bunch of debts.
So do yourself a favor, and get an experienced Realtor to represent you before you do anything else. (Certainly before you waste a bunch of gas driving around looking for houses!)
ULTRA Real Estate Services
Fort Worth homes for sale Fort Worth Tx - website updated daily
Lynn911 Dallas Realtor & Consultant
Multimillion Dollar Sales Producer
http://www.lynn911.com 100's of Dallas homes listed for sale or lease
Follow me on Facebook
Give her a call, she is waiting to hear from you, be sure to tell her you heard about her from me.
SWBC Mortgage Corporation
I will be happy to assist you with your new home as soon as you talk with Leslie!
Keller Williams Realty
Licensed R.E. Broker in MA & TX
*Making dreams come true.
Hope this helps.
REALTORÂ® & Mortgage Broker
Austin Real Estate Pros | 360 Lending Group
office: 512.669.5599 mobile: 512.633.4157
http://www.AustinListed.com | http://www.360LendingGroup.com