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Am I able to buy a $60000 home, with bad credit if I can provide a $10000 down?

My credit score is in the mid 400's. I am trying to fix it, but it's taking a while. I need to move shortly, and would like to buy a home, I have a 10000 down payment. Would it be better for me to use that to fix my credit, or as a down payment?
  • February 01 2009 - Lancaster
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Answers (10)

Best Answer

Don't forget that you can also find an owner who is willing to do owner financing.  10k is a lot to put down on a 60k home. There are plenty of owners who can't sell who might consider this option!

Also I would not pay more than 1K on credit repair if you decide to do this.  Put the money in a high interest savings account and let it earn some interest while you get your ducks in a row!

Good luck!
  • February 02 2009
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Profile picture for novatopro

Forget all of the credit repair advise. Obviously you don't pay your bills. Wait ten years maybe less and all of the negatives will be removed from your credit report.

  • February 04 2009
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Feminizzle,

In my years of reviewing credit reports there is only one reason why your credit score is in the 400's...you are being reported as currently past due on at least one account.  The problem with this is that if you seek financing via FHA, they will be looking for clean payment history on accounts.  I would recommend taking a slower pace and utilizing some of the $10k to resolve the credit issues of the past and establishing some new credit at the same time.  You can utilize the $10K to open a secured account or 3 to help with the credit scores.  Keep in mind that the downpayment requirement for FHA is 3.5%.  It shouldn't take all of your $10K to restore the credit and get good financing for a $60K house.

If you need some additional help, feel free to email me directly.

Thanks,
Dave

  • February 02 2009
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You definately have to clean up the credit first or find something with private/owner financing.  I don't know of any banks or financial institutions lending to those who have scores in the 400s. 

Good luck.

  • February 02 2009
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The advantage of waiting and improving that credit score (other than actually being able to GET a loan) would be the ability to get a more favorable loan.

The only caveat in contract for deed purchases is that if you are unable to keep up with your payments, the lender (former homeowner) gets to keep your downpayment and any improvements that have been made to the property without any compensation to you. (Think of it as if you were renting during the period you made payments)
  • February 02 2009
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Profile picture for novatopro
Sorry to tell you but credit is the last thing you need.  Either find a home that the owner can finance or save your money. The only thing credit will do for you is allow you to borrow more and get yourself right back in the hole.
  • February 02 2009
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Have tried 100% down financing?  That would be your best bet!
  • February 02 2009
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There is not a "LENDER" that will loan with scores like that + your down payment request.  If you want to not have a credit score issue to talk about, contact the credit providers who have posted that you shafted them and negotiate settlements... Get it all in writing and pay them.. Then, do not repeat the steps that got you there, regardless of story.  The truth is:  if you do not change the habits and ways that landed you the 4score credit report, you will stay there and overpay for credit for the rest of your life.  Do not short-change yourself because "you want a home"... Yes a desperate seller might consider it, but that is very complicated (must be free-n-clear basically... Don't bring out the "reynolds" mortgage wrap artists either).  Keep it simple.. if you owe, pay.  clean up aisle 4 and move on with cheaper debt forever.

Good luck

  • February 02 2009
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If your credit scores are in the 400s, there is a 99.9% probability that you will not be able to get a mortgage. It will be better for you to take the time to clean up your credit and get your scores up to at least 580.
  • February 01 2009
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I'm afreaid tou won't be able to get a loan with such a low credit score.
  • February 01 2009
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