Ready to buy a home, my credit is bad but getting better...FICO score 502 and rising and all debt paid...

Asked by Coral, Saint Clair Shores, MI Wed Apr 16, 2008

My debt is paid off and my score is steadily FICO score is 502 right now, however I still can't seem to get a mortgage approval; what are my other options? I've heard of lease to own, or Land Contract, but I hear horror stories about that..... I'm DYING to get out of this rental and into my own home!
Thank you!!

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Marcia Geise, , Brighton, MI
Wed Apr 16, 2008
Coral, The last information I received from FHA was a minimum score of 580. There are lease to own and land contract homes available in the Multiple Listing Service. In most cases, home owners will require a credit check.

If there was a legitimate reason your score was low, say loss of a job two years ago, some may still accept you for a lease. Land contract will require a percentage downpayment which may be 10 percent (varies by home). Yes, there are horror stories, it's all in the contract and if there were any protection clauses for you.

Try going to the HUD in Michigan website and looking under Housing Counselors. This may be an option for purchase or renting. There is a list of qualified lenders on the website. Do not pay additional money or fees, get a copy of your credit from one of the companies that would not approve you for a loan.

I suggest looking over your credit history to see if there are any errors or items you could dispute. can be used once per year for free.
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Shawn Ryan R…, Agent, Belleville, NJ
Wed Dec 14, 2011
to be honest, you may not be ready for homeownership even though it is understandable that you dont want to continue renting. you need to get your score into the 600s before you are ready. even if you manage to qualify for a mortgage before that, you will get killed on the interest rate
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Michelle Gor…, Agent, East Grand Rapids, MI
Wed Apr 16, 2008
Have you tried to get approved for FHA, if your dept is paid and you have been paying bills on time for the last year, it may be a good fit for you. FHA does NOT look at credit score. A good resource for pre-approval (as not all lenders are the same, even with FHA) is Brendan O'Driscoll at Treadstone.
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