I would like to buy a home but i need to know how i could do this with less than perfect credit.

Asked by Vicki, Hurricane, UT Sun Mar 11, 2012

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Irina Karan, Agent, Aventura, FL
Wed Apr 25, 2012
Hello Vicki,

Best thing to first find out just how "imperfect" your credit is.
This can be done by meeting with a loan officer and asking him to give you a copy of your credit report (some will do this for free and some will charge). You will see a lot of good info there - besides all three credit scores, you'll see what type of "derogatory" info you have to fix.

Some of it may not be reported correctly, so it could be removed - by yourself, contacting the credit bureau and requesting the wrong info to be removed (their contact info will be on the credit report also or you can google them). You might need to also reduce your used to available credit ratio on each credit line (to be below 30% on each line of credit). With new FHA guidelines, starting April 1, 2012, you will need to pay down all collections (below $1,000 total on all collection accounts).

When meeting with a reputable loan officer, ask more questions on how to fix your credit.
You may have to fix your credit first, before buying though.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes
Ryan Andersen, Agent, St George UT 84770, UT
Mon Mar 19, 2012
The truth is that if you don't qualify for a loan from the traditional lender then you will have to look for seller financing which means you need to proceed with caution. You will need at least 10% down for most sellers and some may require 20% down. Just beware of sellers who offer seller financing and still owe money on their home. This is called a wrap and is usually a trigger for a lender to call the note on the home due which means that the seller would have to pay the note off, if they don't have the ability to do so you could lose your down payment and the house. If seller financing is the only option for you then proceed with caution and find a Realtor who will help you navigate this situation and find the right seller for you. If you don't have any down payment money and not good enough credit to qualify for a loan then seek a credit counselor who can help you remedy your credit situation so you can buy a home. Renting a home may be your only option for the time being.
0 votes
Mack McCoy, Agent, Seattle, WA
Sun Mar 11, 2012
Hmmm. I'm guessing that "less than perfect" means, really bad. Late-pays, a collection or three, high debt-to-income, maybe a few write-offs.

Vicki, the best thing a person can do before they buy a home - and commit to a thirty-year mortgage - is to get their credit in shape, and this means getting into the habit of paying all the bills on time, every time. It's like training for a "fun run" or something - there may be some setbacks, but you keep it up until you can make the five miles without injury. Or see that score zip up into the high sixes, and maybe even the sevens.

All the best,
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sun Mar 11, 2012
Depends on how exactly less than perfect; however there are other factors besides credit that determine mortgage qualification, therefore for a personalized answer visit with any licensed loan officer.
0 votes
Don Tepper, Agent, Burke, VA
Sun Mar 11, 2012
Everyone has "less than perfect credit." 750 is "less than perfect." 700: The same. 650: The same. Down to around there (actually, about 640) you can qualify for a conventional loan. Now, if your credit score is 450, that's like calling a Yugo "less than a Mercedes."

So, if you're at 640 or above, there shouldn't be a problem. Below that, and it'd be best to work to get your scores up. You can always try owner financing. Or, if you're committed to improving your scores, a lease-option is a possibility.

Another possibility: Find a solid co-signer.

Check with a good loan officer or mortgage broker to determine just where your credit score is and what you'd qualify for . . . or what you might have to do to qualify.

Hope that helps.
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