Do me a favor and ignore your credit score for a second. One thing that you need to realize regarding your credit is that what is done is done. Your only option for past credit delinquencies and collections is to either pay them off or leave them alone. While your score can be a determining factor on a conventional loan, it is less of a facotr for an FHA loan. If your credit is bad because of past factors such as job loss, medical issues, natural disaster, etc and you can write a letter of explanation and provide some supporting documentation to that fact. Along with that you can show not only recent timely credit that is on your credit report and you can provide alternative credit such as 12 months worth of timely payments for such items as Auto Insurance, Utilities, Cell Phone Bills, Rent Checks, etc. I even had someone use their last 12 months of payments for their child's braces.
If you can support your credit worthiness and your ability to repay, then a lender is more likely to approve your loan vs. other applicants. It's all in the way you present it.
Yes, you want derogatory items removed from your credit report so your scores will improve, but you don't have to be under the impression that that HAS to happen before you can own a home.
Please call me if you have any questions.
Your first step is to contact a mortgage broker. They can get you pre-qualified over the phone within a matter of minutes. If your credit isn't where you need it to be, many of them will recommend steps you can take to improve your score.
Your second step is to contact a Realtor. There is no cost to you as a buyer for representation, and having a professional on your side will help you throughout the entire home buying process. Tell your Realtor what you want/need in a home and what you are pre-qualified for. Our job is to find homes that meet your needs and let you visit the homes. Once you find the perfect home for you and your family, we help you with all the necessary paperwork to purchase the home. We work directly with your lender and we guide you through the process from start to finish.
If you have any other questions/concerns, please let me know. There area a couple of great mortgage professionals that work in the McKinney area that I can recommend to you which will be very helpful to you. Please feel free to call me at 214-418-0180 and I will be happy to provide their phone numbers.
Have a wonderful day!
Coldwell Banker Jane Henry Realtors
North Texas Top Team Realtors
Are you certain, you are not "credit worthy?"
We find that many people have a poor personal opinion of their own credit....our recommendation is to contact several lending agencies to get their input.
If your credit is as you say it is....you might want to look for an opportunity to lease with the option to buy. Under the present market conditions, we are seeing more and more of this type of arrangement. To find out what is available in the "lease option" market, we suggest being in contact with your local Trulia real estate professional.
We hope things work out for you....
The "Eckler Team"
These days customer service is even more important than ever. Prospecting for new clients is a necessity, and it makes sense for realtors and loan officers to work with buyers with credit issues over the long run.
Consumer Credit Counseling Service http://(www.cccs.net) is one place you can be sure you won't be ripped off in repairing any blimps on your credit. Most loan officers will have other folks they have confidence in that they may suggest you talk with.
First step is to talk with a lender and see where you stand now. Second step is to find out what you need to do to improve your creditworthiness.
To get specifics to fit your situation, you are going to need to speak in-depth about your situation to someone.
You would be surprised at what can get approved for good rates.... but if you are indeed below the credit standards, I offer a free one-on-one credit consultation.
This consultation includes going over your credit report and loan application to address deficiencies that are keeping you from buying today.
Typical consultation clients are loan ready in 6 months or so. I only have one rule. You have to read my free ebook before I will help you. I don't have time to work with someone who can't complete this little task(You would be surprised at how many people will not complete this step. They want me to do everything for them).
First, don't feel that you are an isolated case. Many people are in your shoes. If you don't know a good mortgage broker that you can trust, I will be happy to assist you pick one that will listen to you and help you.
Earnest deposit expectations vary from region. The lowest I have ever heard of was $500, but that was unusual. I would expect at least $1,000, but it could be very different in Texas.
Home inspections tend to run from $300 to $700 dollars, depending on what needs to be inspected and local costs.
So, if you are looking at a $150k home, your upfront costs are going to be at least $5250 for down payment, plus at least $500 for earnest money, and at least $300 for home inspection for a total of:
Just something else to consider.
Second, go to the Ginnie Mae website and use the affordability calculator there to see if you can afford a home you would want to live in. You may actually be better off renting.
Take a close look at your debt to income ratio. This is one of the most important aspects for getting a loan. Do you have any major bills that will be paid off soon? In two years, five years? If you are in a position to pay off a significant bill (like a car payment,) this will help in getting a loan.
If you have used the Ginnie Mae calculator, you have an idea of how large of loan you could afford. Figure out 3.5% of that loan amount. This is the money you will need to come up with for an FHA loan.
This information is just a baseline to have before going in to speak with a lender. You could try speaking to the loan officer at your bank.
Have a good week.