Can you purchase a home with a 602 credit score?

Here is a brief Home-Buying Course 101 I do with new buyers:

Min score for FHA is 580. As long as you have sufficient income, 2 yrs on the job (a college degree counts if you are using the degree in your job), last 2 yrs tax returns or W-2, last 2 check stubs, last 2-3 months bank accounts statements, no late payments for the last 12 months, no unpaid charge-offs your chances are as good as anybodys.

Your payment will be calculated at 29% of your gross pay (before taxes). The max debt will be calculated as 39% of your gross pay, to include any outstanding debt that will not be paid off in less than 10 months like: daycare, child support, student loans, car or credit card payments, basically any reoccuring debt you are paying on including the proposed house payment. They will then calculate the price range of home to seek. FHA requires a 3% down payment and closing costs will average about 3.5% of the loan amount. Your real estate broker can ask the seller to cover that for you out of their sale proceeds or a family member can "gift" you the closing funds. If you are getting married you can also do a bridal registry at a local lender. If you are a first time buyer there may be special programs available to assist as well. Demand a fixed rate as adjustable rates will only be going up in the near future as they already are historically low. Special programs for first timers usually are a bit below market anywayif you qualify.

Choose a full licensed real estate broker, one with the highest level of real estate license status your state recognizes. They also should have minimally the CRS and GRI designations. Look for the top 3 agents in an office as they usually are go-getters and will do a good job as their track record speaks volumes.

I feel that 100% financing is not in your best interest becaue if you get in a bind and must sell you have no cushion until you have been there a few, perhaps several years, and you are even slower to build equity, meaning your wealth. As for building credit scores, pay your credit card bill in full monthly, pay all bills on time.

There is no real advantage in paying your phone bill months in advance. There are advantages in paying off debt early like car payments or credit cards or your home. If you have little to no debt you have real power over your destiny. No worries about making the next payment, no asking for a loan to go on vacation, you pay real money for what you buy, not inflated with interest.

Credit tends to be mismanaged in our society. People need to learn to live below their means a bit, as masternig that will in fact allow you to eventually live above many people, debt free. I went broke in 1985 and learned the hard way. Today I have recovered and teach people like you for free to manage their income. My sons are learing this lesson from me as they too work to build their own wealth. Both intend to own their homes free and clear within 10 yrs of buying, and I believe they will make it. I have 40 hrs of finance class and more thant 500 hrs total real estate and finance related education. I do not claim to have all the anwers, but I do try to give good answers. This one works without fail.

Best wishes to you!

Yes you can, contact a local Realtor and have them recommend a reputable mortgage broker or lender. Get prequalified and then have the Realtor, who should be representing you, show you only homes that you can afford based on the prequalification...

Happy home owning...

Regards,
Joe Ballarino
http://www.AmerivestRealty.com

Hi Charles,

You can buy a home at a credit score of 602. But financing a home at a credit score of 602 can be difficult, though not impossible. You need to shop around for a lender who can come up with a mortgage loan offer at your credit score. However, the lender may charge you a higher interest rate since your score isnâ€™t that impressive.

But once you get a loan and you are regular on the payments, I think you will be able to build up a good credit score, and itâ€™s going to help you in future for any kind of credit you may apply for.

If you are in a hurry to get a new home, you may apply for a loan. Or else, just wait for a few months, try to improve your score and then apply for the loan. Surely you will get far better rates of interest when your score improves.

Thanks,

Mortgage Mentor
MortgageFit Community

maybe, go to a mortgage broker who deals with a lot of lenders

yes you can!! email me
nsnow2251986@yahoo.com

Thanks!

Nikki

Lender will give you money for sure. Probably charge you a higher interests rate and extra insurance on the loan for not having awesome credit.

Would you consider delaying your plan? Professional investors are careful in choosing each investment that would be near or immediately cash flow positive. With overpriced housing market, that is not possbile.

For example, it costs $500,000 to $550,000 to buy a two bedroom units in Sunnyvale California. Mortgage monthly payment with nothing down is $3500 to $4000 a month with 7% APR. The rent one can collect from such unit would be $2000 a month. Therefore, for each unit you buy, you would lose $1500 a month.

* We assume tax benefits would cancel out with tax and maintenance fee. Please consult your CPA.
**If you have large down payement, the rate may be lowered.

Another important factor to consider, home price may not appreciate as much anymore.

http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

Probably you can do it, as somebody told me, a car goes, but the house is not moving anywhere...
The problem is that they could ask you to get a bigger down payment and higher interest.

Get a mortgage ALWAYS FIXED, NEVER, NEVER get a variable type, I think they are called ARM, you will pay a lot of money in a few years.

Absolutely you can buy with a 600 score. Not to mention you can do 100% financing as well. Yes your interest rate will be higher than someone with a 700 score but you can buy. I hope this helps you but if you have any further questions or need any help getting prequalified please feel free to email me or visit my website www.dantadgerson.com.

Not sure read some credit tips and more on this site to help you with it

Yes, you can if you contact the right lender. We had credit scores around 600 when we purchased our home and we got an 80/20 loan. We borrowed 80% of the purchase price and they then processed an immediate 20% 2nd mortgage. We didn't have to put anything down. The only thing we had to pay was closing costs.

You can but it would be a lot better and cheaper on you to clean up your credit a lot before you do. If you had a 778 score you would pay about 6.5% and could get by with 5% down payment. But with a score of 602 you will pay more like 20% down minum and some where around 8% interest. That is a lot .. But with your score so low would mean you have some collecters after you and you would never get approved with even one bill in collection.

Clean it up first..

I really think you can. Check out www.myownrealestate.org

Yes you can. It will affect your interest rate, upfront points and possibly initial down payment. If prime is 5.5%, with a 600 credit score you should pay around 7% with a point or two up front. Each point is 1 % of the loan (for example 1 point on a 100,000 loan is 1,000 dollars) Yes you can still get a mortgage, but be wary of mortgage companies taking advantage of you. go with a credit union first.

Yes the rule of thumb is that the lower your credit score the higher your down payment needs to be. So if you have a score in the depths of hell, all you need is a really fat down payment. The bank will be more willing to take the risk if you take some of the risk out of the equation.

For example. If you put 50% down you stand to lose a lot of money if you go south on the loan. The bank feels there is less risk to them if you are into the home a lot deeper than normal.

The bank won't even blink if you put down 75% They know they will get their money back if you go dead beat.

The rub is most people with lower credit scores also have less money for a down.

So save your pennies, invest wisely, pay your bills on time and in full. If you pay a little extra (my house phone is paid 9 months in advance) it pumps your score up.

One trick is to use your tax return to pay off utilities for the coming year. That move alone will pump up your score a bit. IT will also impress the bank that your AHEAD on your bills. Thats a good sign to them. So if you get your return in april and you pay all your bills ahead till about next april, your off to a start. Not a great start but a start. Now all the money you used to spend on bills can go toward what ever credit card debt you have. Paying extra on that will also make a bank happy and help your score.

Getting out of debt will also help your score.

Once your out of debt you can churn your account. In the stock brokering world churning is not legal. In the credit world it is.

Get a credit card and take a cash advance Put the money in a savings account and DON'T TOUCH IT. At the end of the month, remove the savings and pay the card in full plus any interest. Yes this will cost you a bit but its worth it.
Now do it over and over again and again.

The bank sees you borrowing money
The bank sees you paying it back on time and regular as clock work.
The bank is happy and you are pumping your credit score.

Method number 2

Get a second job and put all of that paycheck into savings. You don't want to tie it up but you do want to have it where you can't get to it easily. I recomend a stock broker and you have him park it in a money market account. Now it will take you about 10 days to get your money out after you request a check so you can't impluse spend it very well. Build up the account to a large down and your golden.

Method 3

Use a deadly combination of both of the above.

Good luck and I hope you get your home
By the way don't buy a home right now. Wait...prices are turning soft. With the tax law changes coming in 2008, its going to be a whole new ball game. I'd wait till then. That gives you time to pump your score and to build your down. I expect that by about march of 2008 prices will be in a slide and you can name your price and terms. If you have a down payment thats fat and juicy and a fully pumped score, they will cater to you. You will be one of the few. I expect lots of people to be upside down in the mortgage payment by then, I expect to see an increase in forclosures by then...I mean a serious increase. When that happens, if you have cash down and a score that says green light to the bank, Your going to be in the drivers seat.

But you need to be out of debt by then and have pumped your score not blown it. If you screw this up it will be years before you get a home.

DON'T BUY RIGHT NOW...wait for it. August housing inventories on spec. homes is at the highest levels its been since about 1972. Intrest rates are rising ( you don't need to worrie about that if you follow my plan) The average home price in august showed a slight down turn. As people lose value in their homes, they tend not to be interested in putting more money into them. Home depot had its worst month ever in august. All signs point to, John D is right on the money with this one. To be honest with you I"m gearing up for a full on crash. I'm going to be the owner of a lot of homes for pennies if I'm right.

pump your score and plump your down

Thats the plan, pump it and plump it.

By the way thats how I got the home I'm in now. I found one that was not moving. It had been forclosed on. No one had looked at it for 2 years let alone showed interest in buying it. The bank did not want to continue to carry it on the books. It was a thorn in some ones side. I walked in and made a wildly lame offer. 200 a month and zero intrest. They took it. I was stunned (truth was I was just kidding around but dont' tell them that)

IF you are familier with the burning match theory it goes like this every one wants to hold the match but must find some one to pass it too. If you don't find some one to pass it too, you get burned. If the big boys are offering the investment to the little boys, its because they are looking to get rid of the match. So when joe average is being offered a shot at the big time be warned that the match is being passed to a sucker. By the time joe average gets to hear about a great investment, the smart money has turned its profit and is on its way out the door. So when you see add after add for realestate investing, you know its time for a slide in realestate.

Wait for it. Its coming and you can be ready for it if you start now. It will slide. If your one of only a few qualified buyers you can name your terms. Pick your interest rate, negotiat and extra $10,000 off the price or what ever. You can also ask for owner financing. If you want me to buy your house you finance me and here is my interest rate, Skip the bank all together. But to do this you need to be in a position of power. PUMP and PLUMP is the way to get there and be patient. Wait for the slide.

you'll need a bigger down payment

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