Home financing for credit scores of 480 and 580?

My husband and I would like to purchase a home but I just don't see the light at the end of the tunnel. We both have bad credit and recently had to be late on a couple of payments due to him having knee surgery. Do we pay the old debts or what do we do? We are at a lost! I spoke a lender and she said that, and I quote, "no one would be able to help us." Is this true? Why can't good guys get a break? This has made me very sad and we are trying to get our lives together before our second child arrives in November. Any advice would greatly be appreciated. Thank You.

Public Comments

1. Do you have a credit union account? They can be helpful to members with bad credit. I would also try one of those debt conslidator sites. Have you ever heard of blue hippo? They sell computers way over market value but they do help to raise your score. Good Luck!
2. lendingtree.com will help. Also it would be a good idea to pay off as many bills as you can, but make sure that you put money away each month for a down payment. Act like the money you are putting away from a down payment, therefore you wont use it. GOOD LUCK and i'm sure that there will be someone who can help.
3. It sounds to me like you need to repair your credit. The good news is, it's very inexpensive - almost free (gotta pay for postage, envelopes, paper, etc.). It is however, a little time consuming. Never listen to anyone who says you can't do something. There is always a way! I am a credit repair specialist (who works with a mortgage firm) and I fix peoples credit like you and your husbands every single day. We get people who never thought they could get a home into homes with good rates on a daily basis. Good Luck! :)
4. The forclosure rate at all time high and banks that lent people with bad credit money for a home are folding. The banking industry and the government has stepped in and made lending companies start making people qualify more. Unless you have 20% to put down on a home that also has a value greatter then what your buying it for you will be stuck. The general rule of thumb is 28%. In other words your payment with taxes can't be greater then 28% of your gross monthy income. So if you make $1000 a week or 4000 a month your total housing payment including insurance & taxes can't be more then $1120 a month or a week and two days pay.. Im sorry but these are the cold facts. Depending on the state and inclome level your at you may qualify for a federal housing grant or an independ grant to help with the closing costs. one such company is www.libertygrant.com
5. *If* you find a loan, it will be very hard. Be prepared to A) pay a sizable down payment B) pay doulbe digit interest.
6. Your chances are not very good.Except for the possibilty of private financing,I don't see an answer.Espedially since the sub-prime market has tanked.
7. bad credit loan lenders http://www.wesayes.com
8. Sorry, but you are probably out of luck before November, unless you have a big chunk of money saved for a down payment. If you both had scores of 580, you would barely qualify for a loan with 5% down, but with one having a 480 and the other a 580, you probably won't qualify unless you have at least 20% down. If you haven't done so already, you may want to try credit counseling with a counselor accredited by the National Foundation for Credit Counseling (www.nfcc.org) Do not use a consolidator, especially one that wants to charge you a large fee up front. They will drag your credit down even farther. Work on cleaning up your credit by making on-time payments and spending less than you make. Put your credit cards in a bag of water in the freezer and quit using them. Track every dollar you spend to help you see where you might be able to cut, so you can send more to paying off your debt. Every time you want to buy something, ask yourself "Can I get by without this until tomorrow?" If the answer is yes, then don't buy it. Save up a small emergency fund of $1000 or so. That way, when 'life happens' you will have some money to tide you over so you won't have to make late payments again. Once you have a lot of your debt paid down, start putting away money toward a down payment. If you commit yourself to paying down your debt and cleaning up your credit, you should be able to purchase a house within a few years.
9. you should rent until you can qualify for a conforming of FHA loan. As a mortgage broker i cringe when i hear of people getting sub - prime loans. The rates and terms are just terrible in comparison to a conforming loan. Credit repair can and will help your situation as some of my clients that are in credit repair have seen score increases of over 150 points in 90 days.
10. That fact that "No one would be able to help" is not exactly true. However, you are in what is considered the Sub-Prime market. If you were able to get a loan it would be at a very high interest rate, and you would have to put down a good sized down payment. Better rates will not even start until you get to the 620 or above level. You should really get your financial house in order before you think about a house. To do this you need to do the following. Any account you have in collections, work with those people to pay them. A collection account is just about the worst thing that can appear on your credit report, other than a bankruptcy or foreclosure/repo. Ideally you should negociate with them that if you pay the debt, that they remove the negative information. If they do this it will be like it never happened. However, what ever you get them to agree to be sure to get it in writting before any money is sent to them. Any account that is late but not in collections, get them current. Get your credit card balances under 30% of the total credit limit. If you do these they will help quite a bit. Then once you get back on track over time your credit score will continue to rise over time.
11. First, make sure all the information on your credit report is accurate. Second, try to pay off all or any accounts that are currently in collections or make payment arrangements with the creditor to pay off the balance monthly. Third, any credit card that is over 50% of the available credit line should be paid down to under half of your total credit line. Your credit score is lowered when your available balance is over 50% of your total credit line. Finally, if you have bad or no credit and have no credit cards try to obtain two credit cards and make sure all of your monthly payments are made on time. This will help increase your credit score. If you cannot be approved for a unsecured credit card, obtain a secured credit card. Repairing your credit and improving your credit score is a slow process that takes time.