What if you want to purchase and you do not have a good credit score?

Asked by 1awesomewonder, Willingboro, NJ Fri Apr 4, 2014

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Andrew Purdy…, Agent, Leadville, CO
Sat Apr 5, 2014
1. Develop a household budget.
Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as housing, utility bills, groceries and entertainment.

2. Reduce your debt.
Lenders generally look for a total debt load of no more than 36 percent of your total gross income. This figure includes your mortgage, which typically ranges between 28 and 31 percent of your gross monthly income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your gross monthly income.

3. Look for ways to save.
You probably know how much you spend on housing and utilities, but little expenses add up too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at home more often.

4. Increase your income.
Now’s the time to ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want. Keep in mind it is never a good idea to overextend yourself too much physically or financially.

5. Save for a down payment.
Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 3.5 percent down, you can usually get a better rate if you put down a larger percentage of the total purchase. A 20 percent down payment will allow you to avoid paying Private Mortgage Insurance.

6. Keep your job and avoid major shopping!
While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may result in difficulties when obtaining financing. Don’t go buy a new car or new furniture on credit cards or revolving accounts. These actions will impact your credit score and could impair your ability to purchase a home.

7. Establish a good credit history.
Get a credit card and make payments by the due date. Do the same for all of your other bills, too. Your credit score can make or break your ability to get a loan.
0 votes
Good advice....
Flag Sat Apr 5, 2014
, ,
Sat Apr 5, 2014
You should meet a licensed mortgage professional to discuss. Many lenders will give FHA loans with fico scores in the 500's.
Good Luck.
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Jeanne Feeni…, Agent, Basking Ridge, NJ
Sat Apr 5, 2014
A lender can talk you through your options, but at the face of it I'd say, the best advice is to work on improving your score so that you are better prepared to buy. The availability of financing and the interest rate charged will be highly dependent on your score.

Good luck and best,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
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Sandra Scran…, Agent, Denville, NJ
Sat Apr 5, 2014
Attempting to purchase a home with a low credit score can prove to be frustrating and expensive. You won't qualify for a good interest rate and will spend more money in the long run than necessary if you do get approved - which is unlikely. Find a lender which you like and sit down with them and have a frank discussion about your goals and ask them ways to improve your score. Some of these might include getting a secured credit card, paying it off every month on time and not maxxing it out, Don't cancel or close out any cards you may already have and are not using. Pay yourself every month by putting a bit of money into a savings account or 401K or Roth. Negotiate with any creditors you have bills with already to get a payment plan in place then stick with it.

Just a few ideas...hope they help.
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, ,
Sat Apr 5, 2014

With 15 years' experience looking at credit reports, there are often things you can do to improve your score.

In addtion, GSF Mortgage is accepting mortgage application with a credit score as low as 550 (conditions apply).

A Personal Introduction:

I am a branch manager for GSF Mortgage Corp and have 15 year’s experience in the business. I am licensed in New Jersey, Virginia and Florida. I operate out of Cape Coral, Florida. I am also a top-rated Zillow.com and Trulia.com lender. It was built by being 100% honest with clients while focusing on fast responses to emails and phone calls

GSF has received numerous awards and is rated A+ by the Better Business Bureau. We are also a Direct Lender and Seller/Servicer for Fannie Mae, Freddie Mac and Ginnie Mae. We lend our own money and everything stays in house. With our many underwriters, we can easily close your purchase or refi in about 2 weeks.

Apply now: https://raystevens.secure-loancenter.com/WebApp/Start.aspx?

Please call or email me anytime.


Ray R. Stevens
GSF Mortgage Corporation
Branch Manager
Branch NMLS #1122003
Originator NMLS #177825
Office: 239-471-7971
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Mark Riesbeck, Agent, Vernon, CT
Sat Apr 5, 2014
Improving your credit score takes time and discipline. Don't think that by paying cash for everything will improve your credit. It is best if you get a credit card if you don't have one and pay off your balance each month. Look for a credit card company that reports to all three credit bureaus. Make sure you use your credit cards lightly, big balances can hurt your score. Run a credit report and challenge any unfair collections/bills.

Good luck!
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Jane DeVince…, Agent, Kinnelon, NJ
Sat Apr 5, 2014
You need to speak with a mortgage rep and discuss how you can improve your score...

Once you do, you will be able to find a home you love and be able to buy it!

Good Luck!

Jane DeVincentis and Karen Hoffman
973-820-5053 or 973-670-1053
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Fri Apr 4, 2014
Well, you work on improving your numbers....come up with a plan......then buy when your scores are high enough and you can qualify for a loan.

Start by speaking to a mortgage rep in your area.....they can guide you
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