Profile picture for user9540073

whats the chance of me getting a house with bad credit

houses are about 80,000 and just for kicks lets say no down payment what kind of mortgage rates am i looking at lets say i make 40,000 a yr
  • July 18 2013 - Columbus
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Answers (9)

Profile picture for user9540073
well all my bills are in collections 200 here 130 here to about 1500 i do have a 10000 student loan that i heard could be used to boost my credit so . if i pay the collections off n get it deleted an payed student loans monthy it would be seen and boost my credit. my student loans are not currently workin negatively against me but if i did this is it possible to raise my score enough by jan 2014....

thank you all for your insight
  • July 21 2013
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Thanks Michael.

Poster:  

Be careful. You said you had an "old" phone bill. Don't wake a sleeping beast. If you pay an account off today that was from three years ago, that's bringing the date of last activity as of now versus an "old" acct (so far as a credit bureaus go). It would hurt your credit worse to pay something old versus new. If it's very old maybe what you could do is pay it off and ask for a courtesy deletion. It's possible they will work with you. You'd have to call the collection agency to see if they would work with you and provide you the letter.

Then, follow  wetdawgs advice. You need to get some creditors reporting positive information. You probably wouldn't qualify for anything other than a secured credit card but, it's a start. We look for three traditional lines on credit (with FHA we can build non-traditional if necessary but prefer to see accounts you're paying on time actually reporting on credit).

As a side note, I'd also make sure if you are renting that you're paying rent with checks (definitely if you're renting from a private individual versus a management company). This will help.

Someone else mentioned 620 for USDA but all I have seen is down to 640. Different lenders have different overlays but that's just my experience (nothing less than 640 for USDA in Ohio). Besides, Columbus wouldn't qualify. You'd have to move outside of the city to qualify for a USDA loan.  

The score is the same for OHFA (Ohio's down payment assistance program) they too like 640 credit to qualify. Most down payment assistance these days (that I'm familiar with) put a silent second mortgage on the home. They expect you to stay there at least five years so they want to make sure you won't have any troubles making your payments.

Just giving my added input to assist with the other's advice. Otherwise everyone was absolutely right. 


Best wishes to you while you work towards home ownership! (:
Kim
  • July 19 2013
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Profile picture for wetdawgs
If you paid off all the collections, your score would not rise immediately (or at least not enough for a mortgage) because one of the aspects of a good score is a history of paying your bills on time.     With a 480 credit score, you will need to work pretty hard to bring it up to > 640 but it is certainly possible.  The forums at myfico.com (skip all the ads)   have a number of people who know a lot about credit scores and developing an action plan to improve your scores as fast as possible.

Some things to do: 

1. Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.

2. If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score (this is the credit history portion)

3. If you are having trouble making ends meet, communicate with those with you owe money to work out a plan.


4. Keep balances low on credit cards (e.g. < 20 to 30% of limit.  Some people say even lower.)

5. Pay off debt

6. Open new accounts carefully (only as needed)

7.  Check your credit report periodically and make sure it is accurate.

8. Use credit cards and other credit but use them responsibly.  Keep the maximum well below the limits (as mentioned above) and pay them off promptly.




  • July 19 2013
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Profile picture for user9540073
my credit score is a 486 buts i only owe 1500
like old phone bills n such
if i paid these off would my credit score rise like right away
they all went to collections
  • July 19 2013
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Profile picture for leeuga11
I am not sure if your in Columbus, GA or Ohio....we have USDA loans here for rural development and a mortgage lender (which I am not and do not claim to be) told me that you would need a 620 credit score and a really good debt to income ratio to qualify for a no money down loan...we have recently closed two of these types of loans in Alabama.  Hope this helps.  Email or contact me if you have any questions about this type of loan.
  • July 19 2013
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Bad credit and no down payment are pretty much two things that will hurt your chances of being able to purchase. There are programs to help with down payment assistance however they don't help those who have terrible credit. It depends what you consider "bad credit". First you should contact a few lenders and get their advice. Since the housing crash lenders have been much more conservative but are still willing to help if they can. Even if you can't qualify for a loan they can at least give you guidance on getting your credit score up and how far out you are from qualifying. Good luck!
  • July 19 2013
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Profile picture for wetdawgs

First, learn your FICO scores and work to bring them up.

Save a down payment, for kicks, imagine a pot of at least 10% of the cost of the house so you have 3.5% down for an FHA loan, several percent for closing costs and several percent for an emergency fund.
  • July 19 2013
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Great answer Kim.

To the original poster, the days of no money down mortgages are pretty much gone, especially for those with low credit scores. But, FHA loans are still an option. FHA requires 3.5% down payment and a minimum credit score in the 620-640 range (but that changes monthly so you may want to contact a loan officer like Kim and get the exact details.  As far as your credit score goes, do something about it, here's a few quick tips you can do yourself to improve your credit score so that you can get a good rate: https://www.creditfirm.net/blogs/5-simple-credit-repair-tips.html
  • July 19 2013
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If your credit score is below 580, you'll need at least 10% down, 6 months of mortgage payments sitting in the bank after closing, no late payment(s) in the last 6 months (including collections/charge-offs/judgments) but preferably no late payments in the last 12 months. If I can answer any other questions, I'd be happy to help. Regards, Kim Lawson, Licensed in the State of Ohio only. Contact and licensing information can be found on my profile.
  • July 19 2013
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