My suggestion would be to talk to a local lender that specializes in first time home buyers. They will be able to help you through the process of cleaning up your credit and can also help familiarize you with programs that might help. Please let me know if you need referals.
Terry Lipe ABR, CDPE, SFR, CSP.
Coldwell Banker Tomlinson
8205 N Division St
Spokane, WA. 99208
Good luck to you in any case,
Isaac Real Estate Team
Champions Real Estate Services
TriStar Finance #MLO-107799
Office: 425-483-6849 Cell: 206-841-9976
Winner of Seattle Magazines 5 Star
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Real Estate Broker
As everyone else has mentioned, this is not uncommon. DO not think you are the only one in this situation. I encourage you to attend one of my "First Time Home Buyer" classes. In this short evening class we serve dinner, have a lender talk about how to clean up credit and get pre-qualified, and go over the basics of purchasing a home. After the class you can stay after and talk to a lender about your situation and she can give you direct input and advice. We should have you on your way to home ownership soon!!!
Coldwell Banker Tomlinson
I want to echo and expand on what has already been said. Repairing your credit and solving the issues that have caused it to be bad in the first place is critical to long term home ownership. I donâ€™t know you or all that youâ€™ve been through. Iâ€™ve met many good people that have gone through bad situations and ended up with bad credit.
First, order a copy of your reports and review them carefully. Dispute any errors you may find in writing to each agency that reports them.
While you are waiting for your report, establish a budget and a plan to get out of any current debt. This will do more for you than anything else. By getting out of debt and establishing available credit, you will boost your scores. Do not close any accounts, but only use credit for items you can and will pay off each month.
Save as much money as you can. When your scores are in the range necessary to qualify for a good mortgage your available savings will be necessary for a down payment and reserves. You will also be in position to handle any emergencies you confront along the way.
Consider working with a financial counselor to help you do this. On your own itâ€™s easy to rationalize and stay on your past habits. When you have someone helping you, you stand a much better chance of succeeding.
Your scenario is not uncommon. Are there ways to buy homes with "bad" credit...yes but you have to put a lot down and you pay much higher rates. Personally I would suggest looking into what can be done to improve your credit over the next 6-12 months and based on doing things correctly that should be able to put you in a much better position to be able to finance a property without the adding stress of a big down payment or very high interest rates. Be happy to speak if you would like to discuss further.