Horserider, Home Buyer in Naples, FL

My credit is very bad but I'm desperate to buy a home. The short version is I ended up being a single Mom with ruined credit.

Asked by Horserider, Naples, FL Mon Feb 15, 2010

I do have a good paying job, I do have some money put aside for down payment, closing, etc. I pulled my TransUnion score about two weeks ago and am at 591. I have been renting for years and am beyond sick of it. My current rental is being sold and I'm going to have to move again (this has happened to me 3x's now) and I'm desperate to see if there is any advice as to where to turn for financing for such a bad credit score? I do not want to have to sign another 1 year lease at another rental....please help!

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Mott Marvin Kornicki’s answer
Moving is a very stressful thing. Try contacting the mortgage people that have answered your question and see if they can offer you an affordable option. Another approach is to find an owner/seller that will do a lease-option or lease-purchase. When making your proposal to lease-purchase, a good chunk of the monthly "rent" would be applied to the final purchase price.

By doing this, you buy more time to improve your credit while living in your "own" place.

≈≈≈ Mott Marvin Kornicki, REALTOR® ≈≈≈
Aventura | Bal Harbour | Sunny Isles Beach
≈≈≈≈≈≈ "★” This is the House “★" ≈≈≈≈≈≈
1 vote Thank Flag Link Tue Feb 16, 2010
Overall, some good advice below. Talk to a mortgage broker and see where you really stand. And take whatever steps are needed to clean up your credit. Don't go for any exotic-type loans just so you can buy. Read Dan's blogs. They're very good. Beyond that, two observations:

First, it's never good to be "desperate to buy," "beyond sick" of the status quo, and again "desperate." You'll find yourself doing things that aren't in your best interest. You'll find yourself taking advice you shouldn't. You'll find yourself listening to people you shouldn't. I understand where you're coming from, but try moderating that desperation. Channel it into a resolve to boost your credit score, save some more money, and perhaps in a year buy a home. I'm not sure that now is the right time, both because of your credit score and history and because of your current desperation.

Second, Diane's suggestion about rent-to-own (lease-options) is a pretty good one. It's a rental that allows you, at your option, to purchase the property. It can't be sold out from under you. And a 2-year lease-option would give you plenty of time to clean up your credit.

But do some research on lease-options. (I've written one e-book on buying homes without getting a new mortgage, and am finishing one specifically on lease-options.) The information below (not Diane's) on lease-options is incorrect. For example:

[Don't do it] "unless you take the proper steps to protect your earnest money deposit (down payment which is usually nonrefundable in a rent to own situation unless you actually purchase)"
COMMENT: The up-front money is NOT an earnest money deposit. Never. In a lease-option, it's an option fee. That's very different. And, yes, it's usually nonrefundable. The reason: The option fee is consideration for the option. Whether you exercise the option is up to you. It's sort of like buying insurance in that you're getting a benefit even if you don't use it.

"My suggestion is to get a home inspection on any property before you enter into a home purchase."
COMMENT: No argument there. Not sure why it's mentioned here.

"Definitely have a realtor represent you in this type of purchase!!"
COMMENT: Not necessarily. If the house you're lease-optioning is listed on the MLS, then use your own Realtor. One who knows what lease-options and lease-purchases are. But lots of lease-options aren't on the MLS. I'd suggest, in that case, that you use a lawyer familiar with lease-options. You really ought to have a lawyer in any case. And you know the first thing a Realtor will tell you when you ask any legal-related question is: "I'm not a lawyer and I'm not permitted to render legal advice." And that's absolutely correct. So when you ask: "How do I cloud the title so the owner can't sell the property out from under me?" Or "How do I protect myself if the value of the property drops?" Or "What can I do legally if the seller changes his mind and decides he doesn't want to sell it to me?" you're going to be referred to a lawyer. And you should definitely have a lawyer review the documents. So, use a lawyer. A Realtor for a non-MLS property is optional.

Hope that helps.
0 votes Thank Flag Link Mon Feb 15, 2010
Don Tepper, Real Estate Pro in Burke, VA
Dont pay high rates and down payments for a subprime loan your credit can be raised to a 620 fairly easlily contact me thru trulia if you would like to discuss. or apply online at and i can tell you what you need to do to get a loan at regulat terms and rates.
1 vote Thank Flag Link Tue Feb 16, 2010

Speak to a local loan officer that is experienced in credit repair. It could be something as simply as you paying down some debt, removing a reporting error off your credit, or having someone add you as a co-borrower to one of their credit cards. All of which and more a knowledgable loan officer will know what to look for a do on your behalf upon speaking to you and reviewing your credit report. Ask a realtor to refer you to a LO that can assist you.

Lastly, since you'll want/need to go FHA, make certain that LO is experienced with that type of financing as well.
1 vote Thank Flag Link Mon Feb 15, 2010
You are not too far from 620, go to a lender and get their advise on how to bump you up to where your FICO's need to be. Perhaps taking a little of the money and paying something down will right away boast your credit to where it needs to be.

Good Luck!!!
1 vote Thank Flag Link Mon Feb 15, 2010

You should look into a rent-to-own purchase. In this type of situation you typically pay a slightly higher than market rent amount for a set period of time (often 2 years), with some portion of the rent going directly towards your down payment. You have the option to buy after that initial time period expires. But that initial rental period gives you time to work on improving your credit score, while living in the place where you want to settle down.

I hope that helps. Good luck!

Diane Loveridge
Majestic Properties
1 vote Thank Flag Link Mon Feb 15, 2010
Find a good lender in your area who can help you repair your credit and get your score above 620 so you can qualify for an FHA loan. Whatever you do, do not get "creative financing" or get a NON-CONFORMING loan no matter what anybody tells you. If you don't know what that means find somebody who can help you understand, like an honest, local lender.

Good luck!
1 vote Thank Flag Link Mon Feb 15, 2010
I would try to improve my fico score.
The blog below gives some ideas how to improve your score. It was written by a man in the business.…

Your score is still low. Talk to a local lender. They may be able to help you get a loan you can accept. They may even be able to give you great personalized advice on how to imp[rove your score in a relatively short time.

Some things to do if it will be a year or more before you can buy a house.…
The basics of home buying in a simple easy to understand way.…
If those were helpful I have other blogs covering other aspects of buying a house below. Feel free to look.
1 vote Thank Flag Link Mon Feb 15, 2010
I would evaluate why your score is where it is. You are making good money and have reserves, so you should be able to increase your score.
Talk to multiple experienced mortgage broker to find out what loan programs there are available for you.
0 votes Thank Flag Link Wed Mar 4, 2015
Ummm.....question is 3.5 years old....I'm sure she's moved on my now.
0 votes Thank Flag Link Fri Aug 2, 2013
I would be happy to be you with your issues, we help people with less than perfect credit get approved to purchase all the time. If you need help with your credit I can give some free advice as I know credit better than any lender you will speak to. I can also speak to your landlord to give them reassurance you will be able to purchase within a reasonable amount of time.
0 votes Thank Flag Link Fri Aug 2, 2013
You have to get that credit score up. It may take you 3-6 months. However, I advise you to contact a mortgage consultant to help you with what you need to know. hang in there, the future is bright. You are on the right track!
Web Reference:
0 votes Thank Flag Link Thu Apr 15, 2010
Word of advice, never buy anything when you are desperate.
0 votes Thank Flag Link Tue Feb 16, 2010
As long as your score is 580 (middle of 3 scores), I can do your loan. Of course we'd have to go over your credit and profile to make sure everything is good. Please contact me and we'll discuss more. Thanks,
Bill - 770-255-3831 (Atlanta).
0 votes Thank Flag Link Tue Feb 16, 2010
I am weary of rent to own, unless you take the proper steps to protect your earnest money deposit (down payment which is usually nonrefundable in a rent to own situation unless you actually purchase) My suggestion is to get a home inspection on any property before you enter into a home purchase. Definitely have a realtor represent you in this type of purchase!!

I just signed a 7 month lease, which is an option. They gave to me at the same monthly rental rate, but sometimes they charge a little higher for the 7 month lease. I know moving into another rental is not what you want now, but I do feel like there will still be good home prices in 7 months to a year, and you definitely do not want a nonconforming rate. =( You will miss out on the tax credit opportuninty. Bummer.. but much better than getting into a high interest rate loan that can hurt you later.

Open 1 or 2 new small !!!! lines of credit, like maybe a secured credit card or small purchase at Best Buy (cd player type) with 12 months no interest no payments and pay it off in 7. Those are always easy ways to get credit. Buyng large purchases of course is not a good idea.

Have you actually applied for a mortgage yet? You should see somoene, it's free to get pre-approved in most cases.
Someone who can see your full financial situation can give you a better idea of what to expect, and what you can do.
0 votes Thank Flag Link Mon Feb 15, 2010
If you credit issues are less than 2 years old you need wait till your debt seasons over 2 years. Then for credit repair based on statues .

If you credit issues are over 2 years BASED on issues can take 60 - 90 days clear IF completed correctly. I owned a credit repair company for 10 years consultant to many

It is your mid score concerned about

Confer with mortgage broker determine if your can secure a loan IF YES GREAT

You would need 2 years solid employment, 3.5% or more down payment, debt to income ratio in check

Web Reference:
0 votes Thank Flag Link Mon Feb 15, 2010
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