I want to buy a home in Kentucky for 85,000 dollars but my credit score is 618. The bank wants 700 dollars a

Asked by Terri, Kentucky Fri May 30, 2008

month for thirty years. My husbands score is only about 595 but together we make about 73,000 dollars a year. Next April my income will jump to up to make our combined income about 77,000. We only have a vehicle payment of 561 a month. Why can't we get a reasonable payment. We own a doublewide that sits on our 63 acres. We were going to let our land and home stand good for the loan....but 700 dollars a month is crazy. Help!

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Sharon Roark, Agent, Lexington, KY
Wed Jul 30, 2008
Terri -- Something you may want to look at is a seller who is willing to do a lease with an option to purchase. In this market, more sellers are offering this option because it's taking longer for their homes to sell. Over the next 6 months to a year, you and your husband could work on getting your credit scores up and by the time your income increases in April, you'd be ready to take out a loan with much better terms.

Someone else suggested looking into FHA and I agree that would be a good choice as they're not as picky about credit scores. But the lease/option arrangement may suit you best -- that way you may be able to get a nice home now and still have time to work on your credit.

To see all the homes in the Lexington/Central KY MLS, visit http://www.LexingtonRealEstateSource.com
1 vote
Lisa, , 40475
Tue Jul 29, 2008
You may want to check with your mortgage lender to see if the 700 a month includes your taxes and insurance.
0 votes
Don Tepper, Agent, Burke, VA
Sat Jul 26, 2008
Check with a good mortgage broker (not the bank). First, find out how to raise your husband's credit score...and yours, too. With your income (and your assumed expenses), you should be able to do it. Just channel some of your income toward paying off debts. The question will be: Which ones? And there may be some errors or outdated information on your credit reports. Those should be fixed. Also, that vehicle payment is awfully high. Have the mortgage broker take a look at that, too.

Good luck.
0 votes
Bea Rice - R…, , Ashland, KY
Sat May 31, 2008
You might want to try to come up with at least 3% down payment, allowing you to qualify for an FHA loan. FHA loans do escrow your taxes and insurance though, so that will add to the monthly payment. If you own your doublewide free and clear and have no other debt at all besides the car payment, then yes, do shop around with banks and mortgage brokers. Loan officers also figure in things to see what your debt to income ratio is. You have a car, so surely you have insurance payments? And insurance on your doublewide that, unless you plan on selling, you'll have to keep insurance, taxes, utilitites, etc. on the doublewide. All this factors into the interest rate you can qualify for. Also, talk to a credit advisor and see what you can do to quickly raise your credit score. There could even be mistakes you're unaware of that bring your number down. Good luck!
Bea Rice
Ross Real Estate Services - Flatwoods Branch
Ashland, KY 41101
0 votes
Jamie Wilson, , Paducah, KY
Sat May 31, 2008
I am sure that you have already done this, but I would continue to talk with as many loan officers as you can at this point. By doing this you will see that you may have other options and if you don't, you will at least feel better knowing that you were able to get opinions from others in that field of business. I would take this exact question to each and every lender and see what answers they will give you. Good Luck

Jamie Wilson
Thomas Smith Real Estate Services
Paducah, KY 42001
Web Reference:  http://www.wkyrealtor.com
0 votes
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