Have been talking to consultant about buying house been waiting for credit to improve should i wait longer or dive in for where i have improved to

Asked by Gerald, 38119 Thu Sep 2, 2010

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Sun Sep 5, 2010
Wait until the middle of your 3 scores is at 620 or higher. You'll also need at least 2 credit lines that are open for at least 1 year each. Rent can be your 3rd line of credit. No open collections allowed over $5000 unless you can show 12 months payment made on them. Do not pay off any collections over a year old until a loan officer doing your loan has already pulled your credit. If the loan officer is not familiar with credit, ask him/her to ask the underwriter to tell you what to pay off and not pay off. You'll need to write a letter about your credit. They don't want to see spotty credit (late payments every year or every couple of years). It should only happen during significant times (not I forgot or the car stopped working so I stopped paying).

Don't use credit counseling services unless you want to wait 12 months to buy. We consider those as bankruptcy and you must make 12 on time payment before you can move forward. You may also need to create credit in order to increase your score and that can take 6 months before the credit affects your score.

If you have more questions about your credit, let me know. I'll be glad to help you free of charge.
1 vote
Benita Giova…, Agent, Franklin, TN
Fri Sep 3, 2010
Gerald..what a great question but a very complicated one to answer without knowing more about your situation. Questions that I would like to know...do you have a place to live right now that you are comfortable with, can you afford living there and save money while doing so? Have you saved up any money to put down on a house? Your credit score will determine what your interest rate will be when buying a home so can you afford the payment range being given to you? If you are looking to purchase a home in a certain area and can afford the payments based on your current credit score payment then I would look seriously at buying. Rates are at an all time low right now ...around 4%!! Rates could go up while you are waiting on your credit to improve and could make it harder to purchase. Home prices are down also, which makes this a buyers market. Most experts do not see prices going any lower. Also, the lender may be able to offer assistance to clean up your credit in order to raise your score and lower your payments.

In short, this is a detailed question that really needs to be looked at from many different angles.

I googled your question and there are many opinions out there..posted a link for you to look at.. It's from a different city but the response applies...

Good luck and I hope you find yourself in your dream home soon!
1 vote
Debbie Steele, , Memphis, TN
Fri Sep 3, 2010
Gerald, I have a different perspective from the other people that have posted answers. I have properties at deeply discounted prices that we sell to investors and they are then rehabbed for them to either occupy or rent out. Using this method you would buy the property using a private lender and then once the rehab is completed you would refinance to your 30 year fixed rate loan. Right now the lenders we are using require a minimum credit score of 620. You can expect to be out of pocket $2,000 to $10,000 depending on the property, but when you refinance, you will have 25% equity in the property. Hope this helps! Debbie Steele, Memphis Wholesale Property, GP
1 vote
Debby Thomps…, Agent, Wauwatosa, WI
Thu Sep 2, 2010
I would speak with your loan officer. And the two of you can make the best decision that will work with your scores. Not knowing where they are I can't tell you if there is a loan program available for you. Right now price are good and rates are low. But the lenders are very tight on who they are approving for a loan.

Debby Homestead Realty Inc
1 vote
Debbie Norton, Agent, Bartlett, TN
Fri Sep 3, 2010
Wow! I'm sure you are totally confused by now. So many answers from so many sources and perspectives. Most of it sounds like sound advice. The reoccurring theme that I am hearing here is to get yourself a Realtor that you can trust to guide you through the process. It does not have to be me....Do your research, don't cave in to high pressure sales talk. The truth is that none of us know your exact situation until we have more information.

I am not accusing any of those who answered you of anything but trying to help you as I did, but it did occur to me after my post and after reading other replys that a financial situation is just more complicated than any of us can address without the full picture. I just wanted to come back with that clarification from me.

Again, find yourself a professional that you trust and lay out the whole picture for them so they can HELP you and not just SELL you! That will be the key to your success in buying real estate. Good luck to you!


Debbie Norton, Affilliate Broker Homefront Realtors http://www.homefrontrealtor.com
0 votes
Dave DeVos, Agent, Crossville, TN
Fri Sep 3, 2010
Gerald, Talk to your mortgage broker or bank lending officer. I've been in the business 37 years and have never seen it this confusing and complicated. If you can qualify, this is a great time to be buying a home. The bank may even have an opportunity for a foreclosure or short sale. If you are using a REALTOR®, and you should be, use them to find a home for you. Good Luck! DAVE
0 votes
Debbie Norton, Agent, Bartlett, TN
Thu Sep 2, 2010
Gerald, Remember that every time you have your credit checked it could effect your credit score. I would suggest checking your credit score less frequently and attepting to "clean up" your credit with the help of your local credit bureauor credit counseling service. Most of these agencies have resourses to help guide you.

If you have a credit score problem, once you have cleared up your credit report as clean as you can get it, then you can proceed to see what rates and terms are available for your current credit situation.

Good luck to you Gerald, but make sure you take the steps suggested first. Jumping in without taking the first steps to clean up your credit, could cost you in the long run. Patience my friend. but get moving! Rates are low and the time to buy is NOW.
0 votes
Scott Miller, Agent, Boca Raton, FL
Thu Sep 2, 2010
Hi Gerald. First bump up your credit here: http://www.lexingtonlaw.com/ Then see if you can get a better rate from your mortgage broker. A higher score will save you THOUSANDS of $$$$$ over the term of a loan.

GOOD LUCK!

Scott Miller, Realty Associates, Boca Raton, FL
0 votes
Debbe Coletta…, , Memphis, TN
Thu Sep 2, 2010
Gerald, I noticed you are located in the Memphis area, as well as I. The answer to your question really depends on what your lender that you are working with tells you. The higher the credit score, the better the rate. If you are looking into an FHA loan, then that could be different, since the MIP is going to increase soon. Your lender can discuss all the options with you about that also. Hope I was helpful ! Debbe Coletta, GRI,CRS,CRB, BROKER, OWNER HOMEFRONT REALTORS.
0 votes
Jeanne Feeni…, Agent, Warren, NJ
Thu Sep 2, 2010
HI there, prior poster is right, your mortgage rep can answer the question as to readiness and what you can afford. If your credit is improved enough for you to buy, then there are great opportunities - with the convergence of low prices and historically low interest rates.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
0 votes
Robert Spino…, Mortgage Broker Or Lender, Mill Valley, CA
Thu Sep 2, 2010
Gerald,

Get the specifics from your loan officer. It's important to know if your decision to buy will be made of necessity (you don't qualify) or choice (you do qualify but you want to improve your score so you can get a better rate). If you are basing your decisions on guesswork, you will have a tough time making a move that has a high probability of success. Realize too that any decision to wait has to factor in the chance that rates could go higher and that lending restrictions could get tighter.

I am fond of the saying, "Do what you can in the place that you are with the things you have in the time you'e got." I think it holds up pretty well for most homebuyers too.

Thank you,

Rob Spinosa
0 votes
Joe Spake, Agent, Memphis, TN
Thu Sep 2, 2010
Bottom line, Gerald, is you will get better rates and better loan terms if you clean up your credit issues. Have you talked to a credit counselor about working out your credit issues? Mos good mortgage loan originators are capable of helping you get your credit cleaned up.
0 votes
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