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how can i buy a house if my credit score is poor

  • June 17 2013 - Florence
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Answers (4)

Profile picture for aracz
Hi,

Do you have anyone that would possible be a good co-borrower with you on the home?

All the best,

Arpad




  • August 07 2013
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With a low credit score you may not be able to obtain traditional financing, but there are still several options you can pursue.

1. Private Lenders... The main drawback to this option is rates can be as high as 12 to 15 percent.
2.  Owner Finance.  Owner Carry the contract is not easy to find.. but they are available... the more down payment you have the better... but sometimes you can get by with a lower down payment if the sellers are motivated or if you have a good job and background.
3. Lease with the Option to Buy...  This option is actually not that hard to find in larger cities... With this program you will agree upon a specified price, terms and rent for usually a period of one year... you may or may not have to put up money to buy an option.. Say you pay $3,000 to $5,000 for the option to buy at the agreed upon price... at the end of one year you will lose that money if you do not go through with the purchase... if you do buy the home that money will go toward the purchase price.  You will need to meet with a lender to have some assurance that you will be able to repair your credit during the one year time frame.

It is very important that you have a good realtor and/or attorney who is familiar with these programs.
  • August 07 2013
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Typically a 620 middle score is the lowest someone will lend, but you can use 580 if you or your spouse is a veteran. There are several ways to improve your credit if that is not the case:

1. Make your payments on time
2. Increase your credit terms on credit cards. Most of the time you can call the card companies and they will do this. You want to keep the amounts on your cards under 40% of these limits so it actually HELPS your credit.3. Pay doen high balance cards. You can have a card with a limit of $500 that has a balance of 475 that is hurting you, or a card with a limit of $2000 with a balance of 475 that is helping you.
4. If you do not have credit cards, take out a small card and just use it to get groceries/gas then pay it off immediately

Hope this helps
Brian Keenan
  • August 07 2013
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Profile picture for wetdawgs
Assuming you don't have enough cash, you do it step by step.

Step 1 is to recognize that your credit is poor and put together an  action plan for getting your scores up.

Step 2:  follow the action plan (at the same time saving up an excellent down payment, closing costs as well as an emergency fund.

Here's a link to Zillow's buyer's road map for more details of the many steps.

  • June 17 2013
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