I'm sorry to post this without an intro first but we have a bit of an emergency on our hands here and I need some direction. About 1.5 years ago I rented this house from my Mom and Stepdad. Both of them lost their excellent paying jobs and Stepdad is now unemployed and has been for nearly a year now and Mom is holding down several teaching jobs to get by. Mom has asked us (the boyfriend and I) if we'd be interested in buying the house and we are, we love this house and we like the location and want to stay here. Today my stepdad tells me that my mom is freaking out because they're about 4-5 months away from depleting their savings and will be broke and in a position in which they HAVE to sell the house in order to live. We want to buy this house but our credit stinks. My score is 517 last time I checked which was about a month ago, I'm not sure what the boyfriend's score is but I believe the only thing on his credit is a defaulted student loan. We have no money for a down payment and we do not want to lose this house. We both make plenty of money and can easily meet the mortgage payments, we just haven't saved for a down payment because we didn't realize that it was this imminent. Help! What do we do?
First step is to order both of your credit reports DIRECTLY from the CRAs. You can usually do this online and get them instantly. www.equifax.com www.experian.com www.transunion.com There are some -0- down programs out there (I'm not a mortgage broker), but your first step is to see what is causing your scores to be so low, and to see how BF's student loan is reporting.
Next question - What is your parent's credit status. Could they still be approved for a 2nd on the equity in the home, and if so would you be in a position to pay both those loans, in effect continue renting at a higher payment? Then, once your cr's are in order you could then go out and get a mortgage to cover both loans for your parents?
FHA loans require little or no down payment, and your scores can be lower as long as there are no unpaid chargeoffs and no recent delinquencies. Check with a mortgage broker and mention FHA loans. Some won't do them, others will bend over backwards to help you so that you go to them next time.
Go to www.hud.gov they have lots of information on home financing with little to no down payment.... Also check this out... http://www.hud.gov/offices/cpd/affordablehousing/programs/home/addi/index.cfm It's a downpayment assistance grant that is due to be effective this year
