Home Buying in 91762>Question Details

ChiefHogItAll, Renter in Ontario, CA

WhAt if hour credit score is 500 could you still quilfy for a home loan?

Asked by ChiefHogItAll, Ontario, CA Sat May 18, 2013

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Good afternoon ChiefHogItAll,

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.
http://www.consumer-action.org/

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.
http://www.consumer.ftc.gov/articles/0058-credit-repair-how-…

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.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
1 vote Thank Flag Link Mon May 20, 2013
Do not believe you can quilfy!
0 votes Thank Flag Link Tue Jul 30, 2013
All the agents answering this question give good advice. Pay down your debt, fix the collections, etc. Then look for the program best suited to your immediate needs. Keep in mind, the lower your credit score, the higher your interest rate will be. As you can see there are a variety of programs available, even for people with low or no credit.

This could be a good time to buy a small property (like a condo or small starter home for example) just to get your foot in the Real Estate door. When your credit is better, you could sell and buy a larger home.
0 votes Thank Flag Link Tue Jul 30, 2013
I would fix whatever is causing the credit issues before taking on more debt and obligations. If you can’t pay your bills now buying a home will only make it worse. Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Mon May 20, 2013
In my opinion - if someone's credit score is as low as 500, before they try to figure out a way to add debt to their financial picture, they need to figure out how to improve their current financial situation.

So many people are suffering these days because they took on more debt than they could handle...and the banks allowed it

Don't want to see this repeat itself moving forward.

Just because someone "may" be able to do somethig, doesn't mean they should.
0 votes Thank Flag Link Sun May 19, 2013
To answer your question simply - no, you can not qualify for a loan with a credit score of 500.

Clearly you have financial issues you will need to work on and address,

What you can and should do is find out what you need to do in order to get your scores up.
Kind of a financial tuneup!

Find a mortgage lender who can sit down with you, and offer suggestions based on your current scores and situation.

Make a plan and work towards it.

Best wishes..............
0 votes Thank Flag Link Sat May 18, 2013
There are many people that start with low credit scores, but I work with excellent loan officers that help with credit scores. They will hrlp raise your scores. Feel free to contact me.
0 votes Thank Flag Link Sat May 18, 2013
Hello Chief,

Please click on the links below. I promise you, these tip can and will make a difference. I have help thousands of people over the years, many with credit issues just like yours. Please feel free to contact me direct if you have any questions.

Best of Luck!

http://www.trulia.com/blog/george_raymondo/2011/03/can_someo…

http://www.trulia.com/blog/george_raymondo/2012/03/no_credit…
Web Reference: http://www.AFN-Loans.com
0 votes Thank Flag Link Sat May 18, 2013
Good Afternoon,

The lowest I am familiar with is a 580 score FHA but at a premium. 620 is minimum. Is your score due to late payments or to much debt? Give me a call and I can give you some pointers that can help you improve your scores and get you on the path of homeownership.

Regards,

Jose Ixmay
0 votes Thank Flag Link Sat May 18, 2013
As a standard you for a FHA loan most lenders can work with a 620 mid score, I have lenders who can work with a 580 mid score but a premium may apply. The next option you would have to seek for further advice or I can direct you to a hard money lender who can put deals together but these do carry sometimes rather large premiums since you are using cash from investors.

Prudential
John Santana
(909) 230-8300
JohnSantana4Homes@yahoo.com
DRE Lic 1463515
0 votes Thank Flag Link Sat May 18, 2013
You should work on improving your score to at least 640 before you decide to try and buy a home.

You MAY find a lender who says he/she can approve you with a score of 500, but you will surely pay a premium in interest and fees. Not to mention you may find yourself in a home you really can not afford to make the payments. on.

Go to HUD.GOV

They have resources for home buying counseling. The services are FREE.


Best of Luck to you!!!!!

Kawain Payne, Realtor
0 votes Thank Flag Link Sat May 18, 2013
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