Profile picture for MelissaKanne

Can we get a loan still when we have bad credit with not enough time to repair and no down payment?

We have been renting our house for 4 years, and now our landlord wants to sell the house. Me and my fiance' both have credit scores in the upper 500's and we don't have a down payment but only have a month to try and buy either the home we are in or another home.
  • September 15 2013 - Saint Louis
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Answers (14)

It's good to hear that you credit is now 649. We are able to offer conventional loans (5% down payment) and FHA loans (3.5% down payment) where the down payment can be a gift from immediate family. You can contact me directly via my Zillow profile and I would be happy to work on your pre-approval. Good luck!
  • October 15
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Profile picture for Richard Clemens
Hearing the your score has improved to the mid 600s is great news, looking to buy within a month is way to fast even if you have money.  You need to find another rental, save up a down payment and keep improving you and your partners credit scores.  Aaaand start looking to see what is available in the price range that you expect....then you will be an informed, savy buyer and will know a good property when you see one.

Renting may suck, but owning a home you don't like or can't afford sucks worse!
  • September 17 2013
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  • September 17 2013
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Profile picture for MelissaKanne
So the good news is i checked my fico score again (it has been a few months) and it is up to 649 now to check my fiance's. 
  • September 16 2013
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It may be difficult to a find a loan without a down payment unless you are a veteran or are seeking a USDA approved property. In that case you can get a VA loan or a USDA loan that does not require a down payment. Otherwise, it may be very difficult for you to find a loan with a down payment. The best thing you can get to no down payment would be an FHA loan that only requires 3.5% down. Along with that, lenders like myself have been able to give out these types of loans with credit scores as low as 580.

Well I hope this helps! If you have any other questions or need a loan please contact me through the information on my profile page.

Good Luck!
  • September 16 2013
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Hi Melissa,

Shop around for a mortgage broker that can explore all your finance status and advice you properly. Mortgage brokers have access to many banks, private lenders and many different programs.

Best of Luck,

Maria Cipollone
  • September 16 2013
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Melissa, I'm looking over your posts, and I see that you really want to be able to buy this house, and I think that's a good thing.

All you need to do, as a responsible home-owner-to-be, is to have six months' living expenses saved up, a credit score in the high sixes and preferably in the sevens, and a partnership agreement set up with your fiance.

I threw that in because when upon becoming a homeowner, you now have an Estate in Real Property, which is subject to state laws. This is important because, if your fiancee gets clipped in an intersection by a drunk driver, his family may well take over as your partner in the property.

Today's homebuyers are getting their credit in order, which means satisfying that old cell phone bill, and putting money away because the day after you own the home, you're responsible for everything - if the furnace goes out, it's on your dime.

Couples who love one another need to protect each other from external strife. If you were struck by lightning, the State would likely presume that your family had rights to your property. If that's not what you want, then you need to do something about it.

All the best,
  • September 15 2013
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Time is your friend, but don't waste it. Sign a new lease somewhere else, find a lender that will help you work on your credit, and get on a savings spree.
  • September 15 2013
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Profile picture for wetdawgs
Home buying should never be an emergency.  Even if you were ready to purchase with cash, finding, offering and closing home in a month is extraordinarily ambitious.

Start looking for a rental and then start taking the steps to prepare for home ownership.
  • September 15 2013
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Profile picture for wetdawgs
Getting ready to buy a home requires a number of steps.    With credit scores in the upper 500s and no down payment, you need to start at the beginning (which isn't applying for a loan nor looking at houses).

Zillow has compiled a series of articles called  buyer's road map. , which will help you start at the beginning.  (the hud website also has some good guidance).   Home buying is a huge financial commitment, so take the steps to study and learn about the process so you can do it right.  The benefits? You can enjoy your home for a long long time. 

Getting a secured credit card won't impact your ability to save for a down payment.   Use it for normal expenses (keeping less than 25% of max) and pay it off each month.    Buy some gas, or buy some groceries.   It is not increasing debt load. 

How much do you need to save?   I'd recommend the following as a rough guess:
3.5% down payment for FHA
3.0 to 6.0% for closing costs (this will include escrow amounts for property taxes and insurance).
3 to 4% for emergency fund as things happen with a new home, and no one can fix them but you.

We had low credit scores when we started thinking about home buying because we did everything with cash.  Heck, the bank even rejected me for a credit card although I had a  high income because there was zip credit history!   Finally we managed to purchase something with a loan to get things started.  We could have paid cash for that item, but we didn't simply because we knew what it took.

Simply knowing you could afford a house because of the amount of rent you pay is not enough.   Unless you want to pay cash for the house, you have to prove to those you are asking to take the risk of lending you the money that you can afford it and will pay them back.

Good luck with the process.     
  • September 15 2013
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Profile picture for MelissaKanne
i pay 900 in rent a month now so i'm pretty sure we can afford it plus my credit is low with no credit cards the only thing on my credit is an old cell phone bill and my fiance' has no credit cards either never has.the problem with saving the money for a down payment or with repairing our credit is we have a little over a month to find some thing we could easily save if we had more time and about improving credit we were thinking of secured credit cards but dont want to put the money into that if we need to save for down payment
  • September 15 2013
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You should contact a mortgage lender who will review your credit and help you fix it. If you or your husband are Vets you can get a V.A. loan with no down payment. Other wise you need to save for a down payment. Make sure you will be able to afford your mortgage and have money left for unexpected before you commit to a mortgage payment.
  • September 15 2013
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You are missing the the two most important elements of obtaining a mortgage. First things first, you'll need to figure out what's keeping your credit score so low, then move on to saving for a down payment.
  • September 15 2013
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You should be in another home, Melissa.

Those are not healthy credit scores, and I know that many of my colleagues disagree, but I truly think that if you have serious credit problems and a lack of cash on hand, taking on a thirty-year-mortgage is not just asking, but it's begging for trouble.

Rehab your credit, and save up some dough - then, and only then, should you be thinking of buying a house.

All the best,
  • September 15 2013
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