Use FHA or USDA. You'll still get excellent rates. Sit down with a mortgage broker to discuss.

I am a mortgage broker. If I can be of service, please let me know!

MSmith@PrecisionFundingUSA.com

Marty

Michael, In case you are interested I have a home in Manhattan that is only 1-1/2 yrs old with tenants who are leaving in July. I would love to either sell it or do a rent-to-own. It is a 3 bed, 2 full bath, with many upgrades. With your current situation you could continue to let your credit score rise, but pay rent with a portion going to a down payment. That way, you aren't just throwing money away on an apt. You could plan to purchase by the Dec deadline to get the federal tax credit. I have access to a fantastic credit-repair person, and have worked with many reputable lenders who could also help to set things up with your goals in mind. If interested in more information, respond back on this forum and I will provide my contact info. Best Regards, Natalie

Hi Michael,

Your credit score is high enough to qualify. Your best route with that score would be either a FHA loan or a rural loan ( certain areas apply).For FHA you will need 3.5% down and for the rural you can finance 100%. Based on your information, I think you should get a pre-approval and go from there. You seem to have your stuff together and now is such a great time to buy w/ all the incredible prices and the 8K 1st time buyer credit. ( you would have to close an a home before the end of 2009 to take advantage of that) I live in Joliet and am a Realtor and a loan officer so I can answer any questions you might have. I would be happy to sit down with you and help you obtain a pre-approval and/or get you set up on a home search so you can see what is out there. I work for Pinpoint Mortgage in the Joliet/Plainfield area (Rt 59 S of Caton Farm Rd) and Charles Rutenberg Realty in Naperville. Please contact me anytime. I would be happy to help w/ financing, finding a home or both.

Jamie Haake

Hi Michael
It is worth it to not only get pre-approved, but buy something. There are a lot of great opportunities on some deeply discounted homes. You add that to the very low rates and $8000 1st time buyer tax credit means you hit the jackpot. 8k will be a solid down payment for a $200,000 ish home FHA. You are right you will be wasting your money on rent and will jeopordize the tax credit as it expires in November. You can call me, my info is there. I have worked this market for 20 years and helped 100's of buyers just like you take advantage of great opportunities. I look forward to hearing from you and helping in anyway that I can.
Bryan

Hi Michael,

I have a couple of questions/ideas. Your credit score is 647, but increasing? Are you working with a credit repair company? If they are working with you and are projecting your fico scores to increase to over 700, then I would wait. Even with FHA loans, some lenders offer rate incentives with credit scores above 700.

Your down payment indicates you would likely need to go FHA 3.5% down or USDA which is a $0 down loan. USDA has some restrictions (location, income)

If you are asking how much you would qualify for, you would need to constult a mortgage professional because they would need more information than you have provided here. I know a great mortgage guy in Illinois. His name is John Paunan and he is very highly respected in your area. I am more than happy to give you his information if needed.

Bryce Johnson

I would say save up a little more money to cover closing cost, but that depends on how much you wanted to spend on a house. If you are going FHA then your credit score is fine right now, assuming you are talkning about your middle score. If you are not going FHA then you will need more money and a 720 score would help. All this varies depending on the size of the loan you want to get. Based on your cash on hand I would estimate you can get about $200,000 dollar loan. If you can get the seller to contribute to closing costs.

You need to apply with a broker to find out, since you might not do it now, don't let them pull your credit.