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Buying or Selling a Home/Buying a Home with Poor Credit

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Question
Hi there Mr.Denit!

My name is Danielle.  I am a 25 year old recent college graduate from Arkansas.  My husband and I have rented an apartment throughout our college years.  Now that we both have full-time jobs, we would like to stat thinking about buying a house.  The only problem is we both have poor (and limited) credit history (upper 500s).  I get so frustrated when I think that $760 a month is going down the drain to live in an apartment.  Do we have any options or are we stuck renting for years and years?  

Of course, I realize you are better equipped to handle questions pertaining to Colorado - I'm really just looking for general advice.  We are so tired of renting, but the prospects of buying a home seem dismal!  

I really appreciate you taking the time to read and respond to my questions.  That is very, very kind of you.  Thank you!

- Danielle

Answer
Hi Danille!

Well congratulations on taking the first steps to home ownership!  Don't get too discouraged. The ability to obtain financing is credit score driven and you need to save up 3-3.5% of the purchase price for a down payment.

There are a couple of simple steps to help your credit scores rebound pretty quickly. Don't close any of your credit lines. If there are credit cards you don't use, cut them up but leave the line open and never use it. With the cards you do use try only using only 30-35% of the cards credit limit and pay off the balance each month early. Don't hold the bill around until it is "due". When you get the bill, send in the payment. Also, don't constantly check your credit score. Every time somebody pulls your credit, your score goes down.

You want creditors to see that you use credit and that you are responsible using it.  Missed payments, late payments will really hurt any progress you are making with your credit scores. FHA loans are great loan products and aren't as credit score driven. FHA will allow credit in the lower 600's and still provide financing.  

Give it another year of responsible credit management and contact a local loan officer and see what options you may have. A majority of loan officers are commissioned employees, so they will try their darnedest to help you along on your path to home ownership.

Best of luck to you and your husband!

Buying or Selling a Home

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Jay Denit

Expertise

I'm a Real Estate Broker in the state of Colorado. We have a separate foreclosure investing company, so I'm more than willing to answer any Colorado foreclosure questions for both the home owner and investor. I have sold bank owned homes all across the country for all of the big banks. I'd be happy to answer any questions about buying or selling residential homes and specialize in luxury estates. Furthermore, I have some experience in land acquisition and development and know a touch about water rights.

Experience

My experience is really anything that has to do with real estate. From buying and selling to investing and foreclosure, I’ve done it all. Being able to handle the acquisition and disposition under one roof gives me the intimate knowledge of all facets of property conveyance. My foreclosure/bank owned property (REO) experience gives me the problem solving mindset to always find a solution.

Organizations
BARA- Boulder Association of Realtors NAR- National Association of Realtors CAR- Colorado Association of Realtors

Education/Credentials
Xavier University-- BSBA Finance Colorado State University-- Professional Certificate in Project Management

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