Would you guys mind giving a first time home buyer with not so good credit score some tips? I'm just nervous about the whole situation and a little conversation might ease my mind. It's a lot to step into! And, I'm under-researched for sure. that's the way it will have to be as I don't have much spare time these days. Hopefully a good buyers agent can help guide me!
Anyway, my general situation is I earn around $50,000/yr, and have had this as stable income for around 10 years, with the same company. I am in a small apartment with my fiance and our 2 year old. We also have another on the way, due next year. We need more room! We are in Central FL (incomes are low, home values are low).
My fico scores are TU660 EQ645 EX596. So no help there. It's pretty much summed up by-- a 6yr old secured CC I stopped paying on, an old phone bill and two ER visits (less than $200 each for the ER visits). The credit card is really haunting me 6 years later. Also, my two credit cards that I currently have, I have only had for about 2 years. And no personal loans. So I have little positive credit history. But, never late on a payment.
The lenders don't know it, but I am actually someone that is low risk to lend to, with my situation, but my credit profile is no reflection of that.
I want to put down about $20,000, but I could come up with more if absolutely necessary.
So, for someone like me, any tips? I'm thinking of contacting a buyer's agent to help me.
Should I even attempt to apply for a conventional loan. (middle score 640, 50K income, $20-40k down)?
FHA a better option?
Could you pay off the debt to settle those scores? I'd rather see you become more creditworthy to give credence that you're not a credit risk today. Unfortunately, the past is strongly used in determining Fico scores.
Financial talk show host, Dave Ramsey, often refers people in your situation to Churchill Mortgage since they have a manual underwriting process (looking at all factors instead of relying so heavily on the credit score alone like most lenders do).
First keep your money banked.
I am a Tampa Bay are Realtor, so I know the central Florida market. About the same here. You need a good referral for a Realtor so start ASKING AROUND friends, church,
local markets you frequent...
and hire a buyers' agent. There is no cost to you- you have a "right" to have your own representation and make it clear to the Realtor that you want buyer representation.
Your Realtor will refer you several bankers to talk to and I think the only type of financing that may fit you bill is FHA. However you need a minimum credit score of 640, and your lender will let you know which bills you need to pay off...to qualify..as some bills such as medical are more forgiving than others. The down payment on an FHA loan is 3.5%, and I would stick with that unless your lender says you have to pay more. Let the lender know what monthly payment is comfortable to you. Just because you can qualify for more doesn't mean you have to spend more.
Meanwhile, go to Realtor.com or ReMax.com and search for 3 BR/2 bath homes in neighborhoods
in the area you would like to be in. Ride the
neighborhoods, but don't call off signs. Those Realtors represent the seller, and their job is to get highest and best price.A buyers' agent job is to get you the lowest and best price for you.
Shopping for a home should be a fun filled rewarding experience for you. Feel fre to post anytime for questions and chit chat.
Do you have a local bank you can talk to? I realize most banks are only a local branch of a national one but there still are a few banks locally owned and run. They tend to look at more factors.
Check with your bank but realize all banks do not do FHA loans, only conventional loans.. which have stricter requirements including credit score.
The reason I suggested FHA, is they require the lowest credit score..640. You average out a bit less than that, so probably will have to cure some debt.This message has been edited. Last edited by: real estate lady,
|Powered by Social Strata|