Buying a house with less than ideal credit.

[Anonymous]

Can anyone help me out here. My renting lease is up in June and I am tired of paying rent. The prices have fallen enough that I could actually afford a mortgage payment, but a small one. My credit score is 565, which I think puts me just below what is acceptable for an FHA loan. I do not currently live with my partner, but we have talked about going in on a place together. She has access to VA loans but was laid off a couple of months ago after 7 years at the same job.

Will they even consider us for a joint loan? Marriage is not an option since we are lesbians.

Any ideas or advice?

[Anonymous]

It's possible if you have a nice downpayment and look good on paper. Does your partner have good credit?

[Anonymous]

She has excellent credit and no debt.

[Anonymous]

Go to a reputable mortgage broker and see what they can do for you. If anything they can advise you what to "clean up" and where you stand. You can work forward from there.

[Anonymous]

Anonymous wrote:Go to a reputable mortgage broker and see what they can do for you. If anything they can advise you what to "clean up" and where you stand. You can work forward from there.

Does a mortgage broker charge for this or do they just get paid if you actually take out a mortgage and buy a house?

[Anonymous]

You don't have to be married to get a loan together. I have a number of friends who bought a place with a sibling or unrelated friend. In an expensive area like this, a lot of folks can't get a loan large enough to buy a place on their own.

That said, you might want to wait until your partner has found another job. Credit has tightened up enough that banks might hesitate to give a loan to an unemployed person and a person with subpar credit. (not to discourage you, just saying - too many lenders got burned in the subprime and Alt-A loan markets - they're gunshy.) Maybe you could talk to a realtor? there are plenty of them out there with plenty of time on their hands, who could give you a better answer. And a buyer's agent doesn't cost you a thing.

In any case, good luck!

[Anonymous]

I dont know if this only applies to married couples but when we were looking to buy, the lenders relied only on the person with higher income, as far as their credit scores. My income was slightly higher than DH's and even though his credit score was higher, the rate given was based on my credit score.

[Anonymous]

When I was single I bought my current house with less than perfect credit. I have no idea what my score was but I know that within the previous 4 years I had missed student loan payments which definitely showed up on my credit ratings. This was in 2003 during the height of the real estate bubble so mortgage brokers could easily have turned me away. Go see one, they certainly don't charge to talk to you and they will assess your info and tell you up front how much of a mortgage you qualify for. You have nothing to lose.