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I'm ready to buy, but my FICO says otherwise...

I have finally decided to post a question after a year or so of constantly researching my dilemma and looking for answers. So here it is: After many years of being young and dumb I completely messed my credit up. So for the past 5 years or so I've been paying for it, but have managed to crawl myself out of the hole and I'm beginning to see the light. In 2009 I had my Bankruptcy discharged. Fell again into some trouble, but enrolled in a credit company that works with me to clean everything up. My scores have been improving and it's getting better each month, but I am to the point now where I want to buy my first home. Trouble is, my scores are still a bit low, and I get the door slammed shut before anyone actually looks at anything. Basically they see the scores and say the same as everyone else "raise those scores a bit and call me back". Here's what I am currently at: Trans-579, Exper-604, Equi-544. My current income is 47K, 3+ years in my current position, and my total debt is 39K. (that is a car, school loans, and a few minor things) I've also been told by brokers etc, that everything looks good as far as my income, debt to income, job, but the scores are what's hurting me. Now my question to anyone out there that could help is this: Am I able to qualify anywhere for a mortgage? if so, who or rather what companies are the best to work with in my situation? Also one other thing, I currently live in Ohio, but I want to buy the home in South Carolina. My fiance would be moving in the new home until I find employment equal to the income I earn now. So in other words, I'll still be living in ohio, but purchasing a home in south carolina until I can move. Is this not doable? Thanks for anyone who has some insight on this. by benscarletnation@... from wooster, Ohio. Oct 28th 2013 Reply


Jason Bojonny (Coast2Coast)
#74 ranked lender in Maryland - 53 contributions

I have a bank that can do FHA new home purchase with scores above 530. Let me know if you would like to get into contact.Thanks.

Oct 28th 2013
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Linda Wintersteen (Linda123)
#63 ranked lender in Arizona - 1,256 contributions

Ben, you will have to buy as a investment, since it is in another state, or can your fiance qualify? and you could be a non occupant co borrower, until you move. if you do a FHA LOAN.. I have a underwriter contact that is out of the carolinas , and she is great with lower fico scores, email me at yourloanpartnerforlife@live.com linda for her information..

Oct 28th 2013
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Christopher Arco (1stNationwide)
#175 ranked lender in California - 39 contributions

Ben you are very close. All you need is a 580 fico middle score to get an FHA loan. You can still qualify even if you are not living in the property as long as at least one other applicant will be living in the new home.

Oct 28th 2013
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,240 contributions

Until you have employment in SC you'll need to qualify for conventional loan (requires a 620 score) OR (as others suggested) be a co-signer for your fiance on a FHA loan. There are some lenders who say they can approve you with a score as low as 580 for FHA but in general you'll likely need to be at 600-620 or higher. As you know, cleaning up credit is much harder than not having a problem to begin with, and for someone who had a BK any kind of new credit problems is a BIG red flag - so you need to make sure you are never late on anything - ever. Most people I work with that have a scenario like you describe don't have enough positive, current credit to offset the old negative. It is important to have at least 2 open, active POSITIVE (no lates) credit. I have related blog on this site, or feel free to email me and I'll send you some recommendations. pdumouchel@primelending.com - and I'm in SC when you think you are ready to try one of the options mentioned.

Oct 28th 2013
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,240 contributions

PS. Another important factor in strengthening your credit profile is to keep any credit card balances below 30% (target 25% max) of the limit on the card. Paying them off every month is fine, but make sure to keep your balance below that 30% figure.

Oct 28th 2013
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Barb Lanis (BarbLanis)
#70 ranked lender in Illinois - 663 contributions

You have two issues going on, both resolvable. First, you will need to actually move to SC and get a job if you want (or need) to be on the mortgage. You will need to actually begin the job and have 30 days worth of paycheck stubs, so you may need to find a short-term rental.Regarding your credit scores... You didn't mention how low they were at the lowest point, so I hope you are seeing results from this company that you've been working with! Time is always your friend when it comes to improving your score. The time distance that you put between the bad reporting and the newer good payments is important.

Oct 28th 2013
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