Buying a house? Not with your credit score
Whip your credit into shape and be sure you have a steady income before purchasing a home.
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Q: I have a credit score of 494 and work two jobs, but I still don't make more than $2,200 per month, including my child support. Would I be able to buy a house with my income?
— Christina Credit
A: I think it's best for you to postpone your dream of buying a house and concentrate first on improving your credit score. No mortgage lender is going to want to lend to you with a credit score less than 500. Your score is roughly equivalent to one of a person who has recently filed for bankruptcy protection.(Bing: Perfect credit score)
The good news is you can turn your credit score around. All you have to do is get current and stay current on your bills. Negative information, other than a Chapter 7 bankruptcy filing, stays on your credit report for seven years. A Chapter 7 bankruptcy filing stays on your credit report for 10 years. Once you get your credit score back up into the upper 600s or low 700s, you can consider applying for a mortgage.
Your income will limit how much house you can afford. In general, mortgage lenders don't want their customers spending more than 28 percent of their monthly income on principal, interest, taxes and insurance. The lender will have underwriting standards concerning how they count child support payments. In general, you have to have been receiving payments for the past year and expect to continue receiving payments for the next three years for the child support payments to figure into how much house you can afford.
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Aside from income, you must also consider how you will come up with a down payment. When you have your credit in shape, approach your local housing authority about grants and down payment assistance programs to see if you qualify.
what about being outsourced more than once and nasty coworkers and problems with THE BANKS
Tax liens usually expires after 10 years unless they are renewed with the courthouse. All you have to do is contact the IRS or the state depending on who put it there and get a copy of the lien release. Then it is up to you to notify the courthouse where the lien is filed and also notify each of the credit bureaus to get your credit cleared.
Tax liens and judgments never come off your report until they are paid in full or settled some other way. You should consult a tax attorney as they are usually able to negotiate a settlement for less than is owed.
Just a little FYI. I am am currently to trying to buy myself and what I have found out is that for a conventional loan you need to have a credit score of a least 680 or higher and for FHA a credit score of 620. Also, in addition to your down payment you need to have a least two months of expenses is savings. I hope this helps.
I would look for a home owner who wants to finance the sale of his house by him or herself. Still, the same rule applies, three months defaulted and the private contract is over. The seller keeps all payments and regains possession of the property.
Knowing this, would I be able to do it? do I feel lucky and will my luck last twenty years? Dealing with an owner-seller-financer is better than dealing with a monster of a bank with no face but with fangs down to the very knees. The home owner will see you every month and may cut you some slack every now and then, and the contract could be easier or at least not as leonine as it regularly is with a bank.
Just an idea that I have seen work a few times. If you have a good down the owner may lower the price and the interest rate as well...
I would look into that to start with.