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Buying a Home with Poor Credit/Charge Offs

I am getting married next April, and my fiancee and I want to buy a home.  We have not had stellar history with credit.  I have credit scores of 553, 596, and 585, and hers are slightly higher (some over 600).  I have a couple of one to two year old charge off accounts (with $0 balances) still on my report, and a couple of 30 day late payments in the past year or so.  Her payment history is similar.  Combined, we make about $90k per year, and have $65k in student loan debt, and $12k on a car loan.  We have credit cards with small lines of credit ($500 and $300) that we pay regularly.  

My question; what will it take for us to get a home loan?  Is it possible to get one now, with a large downpayment and high rate (not ideal)?  We live in a stable housing market with decent homes priced at or around $150k.  I would really like to stop renting in the next 1-2 years, and I can save up a decent downpayment over that time frame.  

Thanks in advance for your time!
  • July 18 2013 - Rochester
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Answers (2)

Here is an article I wrote to discuss how to obtain a mortgage. The main thing will be your rental payment history. If you score is under 640 without a clean rental history it will be hard to receive an approval. Make sure you pay your rent on time at least for a year. You also need to have a clear trail showing how your payment is being made on time.

http://www.lender411.com/mortgage-articles/10115/understanding-the-mortgage-process/
  • August 05 2013
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Profile picture for wetdawgs
Getting your credits scores up to an acceptable level (say > 640) and saving up a down payment, closing costs and an emergency fund are essential components to being ready to buy.

Pay everything on time. 
Have a diversity of credit.
Use credit wisely (e.g. keep use of credit cards to < 30% of the limit).

Thank you for being sensible and planning ahead.

Here's a link to Zillow's buyer's roadmap. 
  • July 18 2013
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