Wednesday, May 26, 2010

My credit score is 507, 517, and 535.?

I live in Mississippi and it%26#039;s hard to purchase a house. I have things on my credit report mostley from when i was in college. I am finishing up my master degree in June, therefore I have to move out of family housing. The only aprtment that I can currently find will cost my $650 a month. I would rather be paying that toward a house. Some one please help. I don%26#039;t know what to do.

My credit score is 507, 517, and 535.?

There is really no option of 100% financing with those scores, and unless you can find a property worth purchasing that costs less than $60-70,000, your rent payment will certainly be cheaper.

Better to keep your housing expenses as low as possible, and use the higher cash-flow to pay off old debts, build up some savings, and take the time to improve your credit before trying to buy.

If you can clean up all the bad debts on your credit report, and maintain a clean credit history for 12 months after that, you should be eligible for FHA financing after that time. FHA is a great product, allows for a small 3% downpayment, and has great fixed rates. They have no minimum credit score, being approved with a 560-580 score isn%26#039;t uncommon, again as long as you can show that you%26#039;ve maintained a clean history for 12 months. Be sure you pay your rent in a way that can be directly verified, ideally with cancelled checks. Also, FHA will want to see 2-3 additional credit tradelines you%26#039;ve been paying on time as well. If you can%26#039;t get credit cards or other loans that would report to a credit bureau, and with those scores you likely can%26#039;t, they%26#039;d look at your utility bills, phone bills, cell phone, insurance, whatever you pay monthly. So be sure to be mindful of that, and never pay any of your bills more than 30 days past the due-date, and you%26#039;ll get a sweeeet loan in 12-18 months, saving you thousands of dollars per year over what you might pay in a subprime loan.

There really is no hurry to buy right now, as the housing market is still relatively flat. You won%26#039;t be missing out on any gains in appreciation of the home. Who knows? After all this subprime foreclosure stuff runs its course over the next year or two, home prices might be lower still. And you won%26#039;t have put yourself into a high-rate, high-risk loan that might end up burying you in bad credit for years to come.

No comments:

Post a Comment