Help! I need to get a home loan and my credit is classified as “Poor”?
I was wondering if anyone knew of someone who could help me. I have someone willing to build a home for me but my credit is showing as poor (the credit rating i have is 566). I currently pay what i would to own and havent been late on my rent in over 2 years. My husbands credit is also not good and he has a bancrupcy on his credit that was discharged 4 years ago. The seller is willing to finance me a 5 percent down payment but i wonder if I can find anyone to fiance me. Im in massachusetts.
Yorkie posted: 11 May at 11:34 am
chances are slim with that credit score. Go fix that credit score!
Real Estate Guy posted: 11 May at 12:09 pm
Go to: http://www.bankrate.com and you will find a list of banks that offer higher risk mortgages. The problem you may find is the low downpayment and you will probably be required to pay a higher interest rate.
Also try Lendingtree.com. They open you up to private lenders as well as financial institutions.
Don’t give up. It will be worth the effort and experience, even if it doesn’t work out. You should also speak with a credit counselor (many are FREE)who will help you get your credit back on track.
I had the same experience 8 years ago and it was tough, embarrassing, and frustrating. HOWEVER, today I own over $4 mil. in real estate.
Never give up! Never, never, never, give up!!!
pseudo posted: 11 May at 12:16 pm
1. Improve your credit score.
or
2. Put 20% investment of your own money (not a loan) toward the down payment. Your interest rate will still be higher than average.
It sounds like this is not the time for you to buy a home, but it could take as little as 3 – 6 months to improve your credit. In general – pay down credit card balances, pay off old collections and debts, get documentation they are paid in full, then send that information (copies) to each credit bureau and request your report be updated. There are a lot of places that can help you with this process.
hotlittlenumber55 posted: 11 May at 12:28 pm
Laws and guidelines vary from state to state, but it is definitely possibly to get a mortgage with that score. Be careful with something like Lending Tree. Their selling point is that banks compete for you, which is good, but what happens is that they send your application to a number of lenders paying for your service, and then they ALL pull your credit. I would go to a broker shop, they will be able to help you as long as you qualify by income. Your husband’s bankruptcy has been discharged long enough to qualify for a loan as loan as long as he’s had good payment history since, and a decent score, tradelines, etc. There’s one lender I know in particular that will do a 100% loan at a 560 credit score, and they’re called SouthStar. Any broker you go to should be familiar with them. The bottom line is that it’s easier to get a mortgage loan than a credit card most times. You may not have a great rate, but you’d be in the house, building your credit, and not renting anymore. Once you’re in the house and building your credit you can always refinance.
leah_ifft@sbcglobal.net posted: 11 May at 1:26 pm
You mentioned you have someone willing to build a home for you. Are you looking for a construction loan?
The answers the previous posters gave are good. You probably can qualify for a loan to buy an existing home, under the circumstances you described.
Construction loans are different. Even when you have great credit, you are generally expected to contribute at least 10% of the cost from your own funds.
Talk to a mortgage broker, not a bank. They will be able to help you out.
Good luck.
ron d posted: 11 May at 2:11 pm
take the 5%, see if you could get him to hold a 10% second. Get into the house, pay your bills down and on time!!!! Join and/or find a way to fix your credit report, refinance within 6 to 12 months………
Ask the sell to hold a FAKE second……..
H. Fannin posted: 11 May at 2:28 pm
There is no risk involved with using lendingtree.com Lenders CAN NOT pull your credit without you providing them with a borrower’s authorization form signature. The way lending tree works, is they sell leads to mortgage brokers and lenders. The brokers and lenders, buy the leads, contact you, and try to get your business.
Your score is low, however you can still get a mortgage with it. Your husband’s bankruptcy should be a non-issue since it was discharged so long ago (as long as it was actually discharged and not dismissed). Where your problem may lie, is that you are trying to build a house. Realistically, you may have some real trouble with that. You would most likely be better off purchasing an existing home. I know of a number of programs that can finance you at 100% even with that credit score. If you have any questions, feel free to send me a message and I will answer them for you (I am a loan officer).
jon g posted: 11 May at 2:50 pm
Yes .. ME. Do you own the land? I do not care about the BK it does not matter to the mortgage bank I work for. A 566 credit score is also good. Are you both working? can you show income …W2 or check statements (just 6 month)Please email with details and I can tell you the rate and terms (30,40year etc) at johng@oldmerchants.com