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.
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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.
NMLS # 6395
Financing Kentucky One Home at a Time
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.
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.
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!
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.
DRE Lic 1463515
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