IT seems like your credit report needs some serious work to improve not only your scores but your entire credit profile. Here's my advice based on 23 years working as a mortgage professional:
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.
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.
Instead of putting 10% down, spend some of that money on fixing your credit scores so that you qualify for the best mortgage rates and programs.
It maybe something as simple as paying down some credit cards and doing a rapid re-score where we get your scores updated in 2-3 days instead of waiting 30-60 days.
It may also make sense to look into a no money down USDA mortgage since Leander is an eligible area but you need a 620 or better credit score to get your foot in the door for a USDA mortgage.
One of the best things about this mortgage is the monthly mortgage insurance is substantially less than an FHA or conventional mortgage and that's with no money down.
Here's an example: An FHA mortgage of $230,000 is going to have a monthly mortgage insurance payment of $239 but on a USDA mortgage it's only going to add $77 to your monthly payment.
The other nice thing is you can actually roll your closing costs into the loan as long as the appraised value supports it.
Please feel free to contact me for more information or help. You can also find info on my USDA Mortgage website by clicking the link below.
Senior Mortgage Banker
Peoples Bank & Trust
If you would like I can put you in touch with a solid mortgage broker to review your information and guide you for the best results if your goal is to find an approval for a loan. He is located near Cedar Park-Leander that you could also speak to him in person. Feel free to give me a call or email.
Joe Stan Properties
We go down to 600. 620 is easier and 640 is the best deal.
Now, maybe there are some things you can do to raise the scores quickly?
Do you have any credit card debt? Paying that down can get your scores to move fast.
More about scores in my free book... link below.
Scores aren't the only factor though!!!
We have to deal with the REASONS for the low scores.
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You should go to your local non profit housing group for credit counseling. The counselor will go over your credit report with you. They will tell you what you are doing wrong and what you should be doing. Listen to them and when your score is 640+ (mid score), consult with a mortgage officer to see what you qualify for.
If you have any question's or want to talk about this more your free to contact me anytime.