Info about first time buying...

Asked by Anissa Taylor, Charlotte, NC Wed Nov 20, 2013

I am currently about to rent an apartment, but would like to know about buying. I have checked my credit history and unfortunately due to helping other people my credit score is now 549. I am trying to rebuild my credit, but in the meanwhile is there a chance for me to possibly buy a home? What would be the minimum amount I would have to put down? What is a realistic interest rate I would have to pay?

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Amy Baker, Agent, Charlotte, NC
Wed Nov 20, 2013
Hello Anissa,

With all of the lenders that I work with, the lowest minimum score I have seen that they will accept is a 580. With that said, they would be looking for a middle score of 580. You only mentioned one of your credit scores (you actually have three). It would be helpful to know all three since they can vary greatly. If you look up your other two credit scores, they might very well be higher than the 549 that you mentioned. Also, keep in mind that some times the scores that you see are slightly different than the scores a mortgage person will see when they pull your credit.

Also, it isn't just the score that they are looking at. They are also going to look at each individual item on your credit report. Even people with great credit could have trouble getting a loan because they have one or two negative items still on their credit report that have to be cleared up before they qualify.

My best advice is to start early. If you think there is work to be done to your credit, start now. The absolute best start is to go ahead and talk to a mortgage person and have them pull your credit. A lender good at working with first time buyers will help coach you on what steps to take over the next 6-12 months to make sure you are in a great buying position when you are ready. The worst thing you can do it wait until you want to start looking at home to ask questions of a lender.

As for the interest rate, that will vary depending on the lender and the loan program that you use. However, in general if you qualify, you will get close to the going rate. It is likely that if the going rate is 4%, a lower credit score could bump your rate up to say 4.5%. Usually it isn't the case that a lender would bump your rate up to say 6.5% if the going rate is 4% (instead, you simply wouldn't qualify). Rates can't typically vary that much because of rules and regulations on mortgage lending.

To sum up, get in touch with a great loan officer now. If you don't qualify to buy now, get a list of things to take care of and steps to take from the loan officer and get serious about working on them. Then when your lease is up, you will be ready to buy with and will get the best possible interest rate.

If you need a lender recommendation, don't hesitate to contact me.

Amy Baker
Allen Tate Realtors
1 vote
dave, Agent, Charlotte, NC
Wed Nov 20, 2013

I would recommend you talk to a lender. Just because you pulled your credit and it scored at a 549 does not mean it will for a mortgage. It may be higher or lower. But you have three credit bureaus and the way the mortgage companies do it is they pull your score for all three and then throw out the highest and the lowest and take the middle score.

I advise strongly to contact a mortgage lender to see where you are at credit score wise and if you can qualify now for a mortgage. As others have mentioned I also work with lenders who will approve as low as 580 middle credit score so the possibility of buying a home now is good and depending on what is on your credit if you do not qualify you may be able to get it up quickly...I have had some people qualify for a mortgage in as little as 30 days.

The mortgage lender I use is Chris Ayer. His cell phone number is 704-771-3954. Give him a call and he can advise you on the best option for you right now

Dave diCecco
Helen Adams Realty
Cell: 704-519-7895
1 vote
Kandace Stone, Agent, Charlotte, NC
Wed Nov 20, 2013
Hi Anissa,

It may be very difficult to get a home at this current time with a 549 credit score but there are some lenders that will lend with a 580 score (with certain conditions). I would suggest speaking to a credit repair expert that will be able to help you understand and clean-up your credit report.

I know a great credit restoration company that could assist you.

Feel free to contact me at (704) 724-7943.

Kandace Stone
1 vote
Kelly Sniate…, Agent, Matthews, NC
Wed Nov 20, 2013
Hi Anissa,

Have you heard of a program called NACA? This would be a great option for you. They qualify you based on your savings ability and payment history not your credit score. They also offer a great loan with no down payment and no closing costs. I would be happy to talk to you about the process if you would like.
1 vote
Daniel Fisher, Agent, Charlotte, NC
Wed Nov 20, 2013
Good afternoon, Anissa:
You may want to read the Trulia Real Estate blog "I have bad credit and no savings. Can I get a home or am I stuck renting?" If you meet the criteria there, you can probably qualify for a loan. Once your score is 600+middle FICO, you can probalby get a loan with 3.5% down, although there are several programs that provide help to qualified borrowers: e.g. 2% down, or $7500 in assistance. If you appreciate an answer, please give thumbs up. For the most helpful answer, please say thanks with a best answer click.
1 vote
Andy Matejka, Mortgage Broker Or Lender, Greensboro, NC
Wed Nov 20, 2013
Be sure that you are managing and optimizing the type of credit you have open and active now, so that in a short period of time, you can purchase on your own terms.

You want to quickly learn how credit choices you make impact your score so that your future will have no historical similarities like your past.
1 vote
My NC Homes…, Agent, Chapel Hill, NC
Wed Nov 20, 2013
With a credit score that low you're not going to be able to buy a home right now. I would suggest you check out the following website. you may qualify for one of their programs.
1 vote
Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Wed Nov 20, 2013
Regardless of the down payment, 549 will not permit you to qualify for a mortgage now. You'll need to take some time to build your credit up, preferrably into the 620-640 range, although some lenders can do FHA - for the time being - as low as 580.

Also important is that any judgments, charge offs, liens, and non-medical collections be paid off. Even if you get those credit scores up, those cannot be hanging over your head if you hope to get a mortgage.

If you've "helped others out", then be aware that any debts you have co-signed for will count against you when qualifying, regardless of whether someone else makes the payments.

If you want to qualify for a mortgage yourself then it's time to start looking out for yourself and do all you can to improve your credit.

Best of luck!
1 vote
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