Dana Nelson, Home Buyer in Minnetonka, MN

Can I look for a house while I'm resolving my credit history?

Asked by Dana Nelson, Minnetonka, MN Thu Nov 11, 2010

I only have like $2,000 of negative history left and want to get my children in a home soon. I can pay this soon so should I wait until my score is up again eventhough I make a pretty decent salary now and have been with my job a couple years?

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Answers

20
Ryan Dybevik, Agent, Edina, MN
Thu Nov 11, 2010
Dana, The first thing you should do is pay off the bad debt as soon as you can. The next step to take is to talk with a mortgage broker and/or credit repair person who can help you with the credit score. I wouldn't sit back and wait for your credit to improve on it's own. The credit repair companies know exactly what needs to be done in order to move your score up. The right mortgage broker can also do what's called a rapid re-score once the debt has been paid off. Take advantage of the low rates we have today. The credit guy I use always says we need to be proactive with our credit. I have some valuable resources for you if you. If you wish I can put you in touch with them. In the mean time you can start looking at houses! - Ryan Dybevik 651-983-8000
Web Reference:  http://www.QuickHouses.biz
2 votes
Eli Johnson, Agent, St Paul, MN
Thu Nov 11, 2010
Hi Dana, as many others have mentioned, speaking with a loan officer will be a great place to start. They can give you a "to do" list along with an overall game plan and eventual price range that you should be looking in. Then, once you know what your time line is, it is never too early to start browsing. Looking online is a good place to start to get an idea of what is out there, but seeing homes occasionally in person with a Realtor will give you a more accurate idea of what your price range will buy you. Then, once you're ready to be more active you will have a good feel for the market and will be ready to act when the right property presents itself. Best of luck! Eli Johnson 651-357-2536
Web Reference:  http://www.eliasjohnson.com
1 vote
Dp2, , Virginia
Thu Apr 7, 2011
Yes, you can, and you might be able to get something sooner than later provided you're willing to do something creative. Some investors (myself included) will consider working with someone with a few dings on their credit report provided that we see some proof of forward progress (which it appears that you have).
0 votes
Kimberly Pal…, Agent, Temecula, CA
Thu Apr 7, 2011
Hello Dana!

I applaud your hard work! It is very difficult and time consuming to work on getting your debts paid off and your credit score to improve. I understand your eagerness to look at properties, however, it is best to wait until you have the pre-approval letter in your hand before you begin your search. It is frustrating for all parties involved (including you) if you fall in love with a property and want it and are not able to get an accepted offer because you don't have a pre-qualification letter. What you CAN do in the meantime, is look at available properties online! This will give you plenty of time to do your homework. You will have a great idea of what the values are in the area you are looking in. You can ususally see multiple pictures of any property and even sometimes take a virtual tour. This will help you to stay connected to the process while you wait for your score to improve. It is always fun to involve your children in your online search as well...Best of luck to you!
0 votes
David Youngs, Mortgage Broker Or Lender, Roseville, MN
Thu Apr 7, 2011
Hello Dana!

Everyone on this post thus far has seemed to agree that it is best to discuss things with an experienced Mortgage Professional first before proceeding further. My name is David Youngs and I am a Mortgage Consultant with an office over in Roseville, MN. If you have not done so, I would be happy to take a look at your situation and offer some advice on the steps you could take to improve your credit. If you need more help than what I can provide also, I know a great Attorney that specializes in this that I could refer you to that would also be willing to offer a you free consultation. Feel free to call or email me at your convenience if you would like to have a conversation! Thanks Dana!

David Youngs - Mortgage Consultant
Progressive Lending Solutions
651-636-2840 Ext 12
Email - dyoungs@progressivels.com
0 votes
Linda Morse, , Minneapolis, MN
Thu Apr 7, 2011
Hi Dana;

Getting your score up will pay off with a lower interest rate, and in the long run that can add up to a nice savings. I do think looking virtually online is a great way to educate yourself on the market, and also keeps your ultimate goal in mind. So; be patient, look online, and when your loan officer tells you that you can get a better rate because of your hard work and patience, then dive in to the home buying waters.

By the way, I was a great lifeguard before I became a Realtor.

Good luck!

Linda Morse
RE/MAX Results
0 votes
Kristina Smi…, Agent, Minneapolis, MN
Fri Dec 17, 2010
I would hold off on any extensive searching until you know what you qualify for. I would hate to see you fall in love with a home only to find out later that it sold, or that you can't qualify to buy in that price range. If you wait, you may even find out that you could qualify for more than you were expecting. Remember: patience is a virtue.
0 votes
Cathy Wildung, Agent, Maple Grove, MN
Sun Dec 12, 2010
I agree with most of these responses that it is important to begin working with a mortage professional to repair your credit. I think it's only fair to let any Realtor you might work with know your situation, also. Another option you many not have considered is finding a Contract for Deed. In this tough market for sellers, they are more willing to look at other options if they are very motivated.
Web Reference:  http://www.cathyabboud.com
0 votes
Tod Teeple, Agent, Edina, MN
Thu Nov 11, 2010
Dana- If you haven't already, consult with an experienced mortgage loan officer who can analyze your credit history and provide you with a game plan to repair/restore the issues and define a time line that it will take to do so. You probably have a good idea of a general price range and payment that you'll be comfortable with-the lender should be able to tell you if what you're thinking is realistic assuming the credit issues are resolved.
In the meantime, you can "look" at homes in a number of ways: a Realtor can set up a search program for you in which you'll be able to track the market, you can visit open houses and you can periodically visit homes with a Realtor who understands that until your financing is in place looking at homes during this time is meant to help educate you as to values and choices in different neighborhoods and markets.I've been a Realtor for 30 years and for the last 5 years have been working a lot with the most experienced and knowledgeable mortgage loan officer I've ever met. Please email me or call me if you'd like their contact information.
Web Reference:  http://www.todandlarry.com/
0 votes
Joel Friday, Agent, Coon Rapids, MN
Thu Nov 11, 2010
Dana,

There are options out there and they all depend on your situation, but not always dependent on credit score. I allow clients to utilize my search tools any time as people in general enjoy looking at homes. This is obvious in your case to as you are here on Trulia. Let me know how I can help.
0 votes
Gina Schedivy, Agent, Maple Grove, MN
Thu Nov 11, 2010
Hi Dana. It really would not be worth your time looking for a home if you are still trying to repair your credit history. You really should be prequalified for the new home loan before you get in a car with a real estate agent. However, you could definitely interview real estate agents and select one that suits you. Then you can have that agent create an automatic search for you, so you can see what your money will buy in today's real estate market.

Let me know how I can help.

Sincerely,
Gina Schedivy
RE/MAX Results
Web Reference:  http://www.gowithgina.com
0 votes
Mark Griffin, , 55432
Thu Nov 11, 2010
Yes you can. But be sure to work it out with your loan officer. If you don't have one you trust, I would be happy to provide a trustworthy one for you.
0 votes
Jennifer Hen…, Agent, Edina, MN
Thu Nov 11, 2010
Hi Dana,
When you say $2000 of negative history, whether you have collections, or judgments, or just balances of credit card debt or loans remaining may make a difference in what you may need to pay off or not prior to qualifying. If it is a score that needs to be improved, there are also suggestions for doing so quickly depending on your history and what needs improvement upon. I would definitely contact a loan officer and/or credit repair service to determine what the best actions may be for your situation. Be wary however when contacting a credit repair service to make sure they are legitimate and knowledgeable. Also, depending on how much your score needs to increase prior to qualifying a timeframe can usually be estimated as to how long that may take, and a loan officer and credit repair service can probably give you the best indication of timeframe. With that said, if it is something that likely can be attainable quickly, you are in luck and I would say start looking so that when you are approved you will have an idea of the area market and have made some comparisons as to what you want. If it is a credit repair that may be more extensive, you may consider looking into a lease option where you could move into a home now with the option to buy when you are qualified for financing, or consider a contract for deed, which is a purchase of a home now where you can make payments to the seller directly rather than obtaining a mortgage. That type of purchase can typically be refinanced to traditional finance within 2-5 years once you are able to qualify for financing. Keep in mind with a contract for deed option or a lease option, that will limit the homes available that you can look at as only some sellers will offer those terms. Most homes for sale will require traditional mortgage financing from a buyer. Also, with a contract for deed, most sellers do require a down payment of 10-20%. And lastly, if you do decide to make an offer on a home with a contract for deed, it is recommended that you work with an agent to represent you that is familiar with contract for deeds, as well as have an attorney review documents as there are additional considerations to keep in mind when negotiating a contract for deed. Good luck in your home search and if I can be of further assistance please don't hesitate to ask!
-Jennifer
Minnesota Realty Inc.
0 votes
Steele V. Pr…, , Minneapolis, MN
Thu Nov 11, 2010
As suggested there are some creative ways to buy that next house and you don't need to wait for that credit problem to be fully resolved to do so. Don't be afraid to explore outside the traditional realms of real estate.

Best wishes,

Steele V. Propp
Schatz Group
steelep@aol.com
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Thu Nov 11, 2010
Hi, Dana!
You may be able to get a mortgage, but, chances are, until your credit score comes up, you'll most likely pay a higher interest rate or even have mortgage insurance. Do you have downpayment money? That's another thing to remember, the 0% down programs are no longer.
I agree with Aaron, you need to talk to a lender to get the REAL picture on what you need to do.
Stay in touch if you need more info.

Good luck!
Web Reference:  http://www.homestosellmn.com
0 votes
Kurt Evans, Agent, White Bear Lake, MN
Thu Nov 11, 2010
Dana,
To answer your question you can start to look at homes whenever you are comfortable doing so. It is never a bad idea to be familiar with the market so when you can purchase you will already know the market and well feel comfortable with your purchase.
The question I have for you is have you had the opportunity to meet with a loan officer yet. The reason I ask is in the past I have had clients that thought they had issue to find out later that they were still able to get a loan. So my suggestion to you would be to meet with a loan officer and see exactly what your issues are and how to improve them. The loan officer I work with actually gives my clients a work sheet as well as tasks on what needs to be done and a timeframe inwhich to do them to purchase their next property. If you would like I can put you in contact with him so you can begin the process.
Kurt Evans 612 282-5169
0 votes
Brad Anderson, Agent, Maple Grove, MN
Thu Nov 11, 2010
Dana, as far as looking for a home, you sure can look. I would recommend that you check your credit score, and see where you are at right now. You may want to consider a Rent to own property, or buying on a CD. Good luck.
0 votes
Rian Muleback, , Portland, OR
Thu Nov 11, 2010
You can look for a home whenever you want Dana. The important thing is to make sure your Realtor, if you are using one, knows your plan. Like already stated, I would look online first as this will give you an idea of how much the home you are wanting will cost. Another thing you should do is speak with a lender if you have not already done so.
0 votes
Dan Tabit, Agent, Issaquah, WA
Thu Nov 11, 2010
Dana,
Looking online is the best place to start. Become familiar with what homes are on the market and what they are going for. Create a list of features you want to have and need to have for your next home and see if there are homes with fit this criteria in a price range you can afford.
The next step will be to talk to a local lender about your credit. Your negative history will be reflected in a credit score which may dictate when you can buy. If your scores allow you to qualify for a mortgage, start looking. If not, discuss what further steps you can take to improve your scores.
You'll likely need a down payment too, so again talk to a local lender to find out what programs are available in your area and how much you need to save.
Best of luck buying.
0 votes
Aaron Dickin…, Agent, Champlin, MN
Thu Nov 11, 2010
Your score will not immediately pop up once you pay off the debt and it also largely depends on how your score is now to figure when your score will be high enough to qualify for a mortgage. The best thing to do is speak with a loan officer to figure out where you stand and they can offer a better idea of how long you should expect for your score to improve.
Web Reference:  http://www.aaronsold.com
0 votes
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