Credit score 593, i need a home loan very very badly.             Click here to Print

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#jnj5102 - Says,

im in my early 20's i have very bad credit my equifax is 593, as it stands my credit is low due to being able to pay the bills, so i have a lot recent bad history, but i just started my own business and its doing excellent, i will be able to pay all my bills with no problem. my only problem is buying my first house, i want to buy a house that cost around 250,00
i need a loan.
what loan can i get, i tried to apply to a few online and got denied very quickly.

i want to get the loan for the home before i start taking care of the credit cards, because of the area we live in now, it is not safe at all.
i can pay the loan and the credit cards with no problem, but i cant wait 6 months to a year to get my score up so i can get a loan with a good rate, i dont really care about rates right now, i really really want the loan asap to get my family out of this horrible area.

i appreciate any and all help

#MCasper - Says,

I'd suggest renting in a better area with a short term lease. Take care of your credit cards and strengthen your credit score a bit.

It was hard enough to get a decent sub-prime loan before the mortgage fallout, however now anything below 650 is considered sub-prime. On top of your lower credit score you've got what sounds like a pretty large chunk of debt on credit cards, which is probably killing your debt to income ratio(DTI as mortgage professionals refer to it). How much money do you have to put down? Unless you have atleast 20% your loan to value ratio(LTV) will be too high for the sub-prime market.

As I said, find a way to move into a safer area for the short-term, take care of your current debts, and then worry about getting into a good mortgage in about 6 months to a year.

#Laura - Says,

I think Michael is right.


First settle down the other debts. That will help you accumulate a good score. Well you buy a house once in a life time so why buy in a hurry? Take a house on rent for the time being as you are capable financially. Let your score raise and then go for a good rate to buy the house you want to.

#cbass1017 - Says,

Something to consider in this "buyer's" market is that there are a lot of motivated sellers right now. If you find a nice home and the right seller they may be willing to rent to you for a year or write up a land contract with you so that rent can possibly go towards the purchase price. Its just an idea. You'd be suprised what some people will do to sell their homes right now!
#Ism - Says,

You have a couple of things working against you right now. One is the credit history - your credit report can't prove you are good to your word to pay back a loan. The other is you are self-employed for such a short time. Most lenders are going to want to see at least 12-24 months of self-employment, backed up with tax returns - Schedule C or however you report your business income.

The current mortgage crisis was helped by too many people feeling they HAD to have a house they ended up not being able to afford. Stay a renter until your credit score goes up and you have enough time to prove you are a strong business owner, then you can get a house. Don't set yourself up to fail.

#willams peter - Says,

Spam deleted- Richard
#tony - Says,

I read your post and I am a loan consultant.
With your score and debt, I'll tell you from professional experience.
It's all about proving you have suffient income to lenders.
I suggest that you pay off your debt and rent for atleast a year.
That way you'll establish enough credit to start doing the owner thing.
Trust me, in my experience I know that it is very important to have a good start when becoming a owner.
If you'd like more information you can contact me at email deleted for your safety- Richard.
I'd love to answer any questions you may have. Free of charge.


#diem - Says,

You can very possibly get a sub-prime loan but don't expect the process to be easy. Do you have any unpaid debts on your report? They will want those paid at the very least before closing, and will be a requirement. I would consider doing some credit repair and try to get to atleast 650 before considering it. 650 isnt far away and a few deletions if you have any can land you up there very quickly.
#terry williams - Says,

spam deleted--Morningstar
#terry - Says,

spam deleted--Morningstar
#hummingbird - Says,

Did he say his score was low due to being able to pay his bills? Thats what i read.That is really bad if you get bad score for paying your bills.Is that right?I know I have a problem with my cc.I pay on the card then next thing i know I am short and need food or something and end up being forced to use it. I wish I had a card with about 150.00 on it just to use in emergencys.
#Ism - Says,

I think he meant it was low due to NOT paying his bills, since he has a business now and can start paying his bills.
Hopefully he rented somewhere better instead of getting into a dangerous loan. Some people are just better off renting - it's not a bad thing! and it's nice having someone else worry about your lawn.

I have a weak spot for my available credit too hummingbird. My problem comes with defining "emergencies" Wink

#Laura - Says,

Emergency is different for each individual. Let not an emergency make you pull out your credit card. Why not save for these rainy seasons? Stack away the cents and dollars that remain in your pocket every day when you return home. Learn to save, you will never require a card for emergencies like food.
#Ism - Says,

In the last few years, 9 times out of 10 the "emergency" was related to one of the family vehicles breaking down and needing work. I finally got a new car, and while it seems more expensive looking at the budget, it is actually saving us money through it's lack of surprises every 6 months. It goes against what you'd think is good sense, that getting new is better then making do with old, but in our case, the old was costing more money AND limiting what we could do. Now we have a dependable SUV that all 5 of us can go places in reliably.

Now unfortunately GAS may soon become the emergency!! Wink

#hummingbird - Says,

Gas already IS an My hubby does save all his change except bills. It mostly goes to the kids for school.
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