Loveland - Reputable programs for home buyer with poor credit (lease, mortgage)

[kiki1964]

Hello! We are planning on moving back to Loveland and would like to be able to buy a home. Our credit score is low due to problems beyond our control but we are now in the process of building it back up again. I have seen companies advertising for "lease-to-own", "rent-to-own", etc. for people in our situation. One company sounded great, Freedom Property Solutions, but emails went unanswered, phone calls went unanswered, etc. Is there anyone who has dealt with this type of situation? Thank you!

[j_k_k]

Originally Posted by kiki1964

Hello! We are planning on moving back to Loveland and would like to be able to buy a home. Our credit score is low due to problems beyond our control but we are now in the process of building it back up again. I have seen companies advertising for "lease-to-own", "rent-to-own", etc. for people in our situation. One company sounded great, Freedom Property Solutions, but emails went unanswered, phone calls went unanswered, etc. Is there anyone who has dealt with this type of situation? Thank you!

I would distrust all such schemes. Every time someone shows up with a program purportedly to help people with credit problems, it always seems that the people in question get taken advantage of. From payday lenders to debt consolidation services to those ambulance chasers on late-night commercials, there's usually a screwing involved.

Instead, I would ask around Loveland or FC and find a local savings and loan that does mortgage lending and is more old school (don't even bother with B of A, for example). We found one in our area, so they should exist other places. A good sign would be if they don't sell their loans to someone else. I'd sit down with a lending officer and briefly explain my situation, being forthright. I'd make clear that I understood the bank's need to assure strong assets--that tells the officer you know something about banking, because loans are booked as assets on a bank's balance sheet. I'd assert that I could tell them in advance, in writing when the time came, exactly what they should expect to find on my mortgage credit report (which I would have already paid to have pulled beforehand, so I would know).

Finally, I'd make clear that I and my family were going to be settling in the area, and that we would need a strong banking relationship--and the bank who helped us boost our situation back to financial respectability would find us pleasant, loyal customers eager to spread the good word about Joe's Savings & Loan. Loan officers, despite sometime appearances, are quite human. Some have the power to go to bat for you a bit. That would be nice, if you gave them a reason to want to.

I'd have some money with me. When I found the bank I wanted to deal with, after talking with the officer, I'd ask him or her to direct me to someone who handles basic savings accounts, and I'd open one. I'd ask about direct deposit information. (People who are thrifty are not unlikely to have savings directly deposited on a regular basis.) A person who deposits money is now a customer. Customers are different from potential customers. I'd follow through on the direct deposit stuff, too, even if it's just twenty bucks a paycheck. Everyone needs to build a reserve.

None of this guarantees victory, but we didn't even do it all correctly, and we got a car loan despite my wife's ugly previous-marriage-related FICO, then a home loan. The biggest elements were a) picking the right banks, and b) complete forthrightness about the situation, which costs you nothing because they're going to find out about all of it anyway.

If that doesn't work, and you can't find a single bank that wants to do business, maybe then you start trying to figure out what gotchas might await you with Harry's Helpful Lease-to-Own-a-Hovel. But first, I'd exhaust the normal way. And I'd definitely keep my home purchase price range reasonable, and I'd let the officer know that. This ain't going to work if they think you want to afford a McMansion, because sensible people in credit rebuilding mode are willing to settle for someplace more modest than people who have enough savings to buy such a place outright if they desire to. You want low payments, payments you can sustainably make, and it's important that the bank understands that you care about that.

[2bindenver]

FHA loans are not credit score driven. Talk to a local loan officer, find out exactly what it would take to be approved for a loan. Follow those instructions to the letter.

[kiki1964]

j_k_k - thank you so much for your response. It was very informative and entertaining to read! I really appreciate your advice!

[kiki1964]

2beindenver - Thank you for the information on FHA loans, I will definitely check that out. I had been told by one banker here in Minnesota that we had to have our credit score higher for that type of loan but I'm wondering if we were misinformed. Thank you again!