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Old 05-06-2015, 01:55 PM
 
670 posts, read 1,274,121 times
Reputation: 453

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Hi,
For those of you who are experienced with homebuying, hopefully you can help me. I am still very confused by the homebuying process. I would be a first time homebuyer and am trying to decipher the best path to home ownership with the least out of pocket costs and the fastest way BUT I have to increase my credit scores. My questions are:

1. What is your advice on improving scores quickly? I already pay on time. Would you pay any companies to do it?
2. FHA vs. Navy Federal LTV 100% financing loan. Which one is the better option?

Right now, I have the following options:

1. Work with a non-profit organization on becoming a homeowner (they're really slow though)
2. Work with broker and his guy that will help me with credit issues for a fee. (I am leery)
3. Work with Navy Federal via their Realty Choice program for 1st time homebuyers.
4. Work directly with the builder to get assistance with credit clean up and loan approval.

My credit is the one thing that has me completely stumped here mainly due to medical bills and credit cards being beyond 30% of their balances, which I am working on reducing. Not sure who can really help me the fastest and most effectively. Thanks in advance for any helpful advice!
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Old 05-06-2015, 02:39 PM
 
Location: Raleigh, NC
19,399 posts, read 27,703,839 times
Reputation: 36051
I'm no expert on bad credit. But #2 is totally BS. Don't pay anyone a fee for helping you with your credit! And that nice broker who is going to refer you to somebody - dump him, remove his email and phone number and name from all contact lists and memory banks in your brain. It's all a scam.

#1 might be a good idea as long as they do not charge you a fee or do not want access to your bank account. Don't let anybody have access to your bank account.

Were I you, I'd forget about buying a house until you get the credit scores fixed, save up for a down payment, and save up for an emergency fund. Just erase that idea from your brain until then. You need time to straighten out your life (both psychologically and financially) before you do something foolish and make this worse.

Here's some articles from reasonably reliable sites for you to read.

7 Simple Ways to Improve Your Credit Score | Bankrate.com
Improve Credit Score: Tips to Fix Poor Credit & Raise Your FICO Score
https://www.consumer.ftc.gov/article...-help-yourself

And when you've got the credit and debt thing fixed, start reading some books from the library to educate yourself about buying a home.

I don't often recommend him because I think he's a zealot, but it does sound like you might be a good candidate for Dave Ramsey.
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Old 05-06-2015, 04:08 PM
 
670 posts, read 1,274,121 times
Reputation: 453
Thanks very much for your feedback JKgourmet, I really REALLY appreciate it. I did take a homebuyers class through the non profit last year but the credit and mortgage piece is still fuzzy for me. I am going to take your advice and read up more to better understand the different products and what they all mean. And no the non-profit does not have any access to my bank account!

[quote=Jkgourmet;39512660]I'm no expert on bad credit. But #2 is totally BS. Don't pay anyone a fee for helping you with your credit! And that nice broker who is going to refer you to somebody - dump him, remove his email and phone number and name from all contact lists and memory banks in your brain. It's all a scam.
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Old 05-07-2015, 04:54 PM
 
Location: New York
2,251 posts, read 4,906,781 times
Reputation: 1617
.

My $00.02 -

Normally I am a big credit advocate. I'm fishing with you mentioning Navy Federal Credit Union, are you ex military?

  • If so look into VA mortgage that doesn't look at the actual score, it will consider any unpaid accounts and your debt to income ratio (called DTI).
  • If not ex military - focus of getting your credit up as discussed above....
Good Luck


.

Last edited by Modification Specialist; 05-07-2015 at 05:28 PM..
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