House purchase

Are your debts unsecured? Do you want to use a mortgage company for paying off your unsecured debts? If that's the situation, why don't you try a consolidation company for paying off the debts? There won't be any collateral involved in between.

help03

Have you pulled your credit report recently? What are some types of debts that are listed? Do you currently have a large amount of debt owed? Even if you pay off 2 credit cards that only have a balance of $500 each, that will help raise your credit score. Maintaining a consistant payment towards your current open accounts will also look good in your favor. This also includes cell phone bills, cable/utility bills, and even a gym membership.

When buying a home, remember that most places will require a down payment. If you had a large chunk saved up, you could actually use some of that to help pay off debts, and you wouldn't need as much to fork over as a down payment. What type of price range are you looking at? Just remember that having bad credit can effect your interest rate that gets locked in when buying a home. And later down the road, if things come up, you don't want to end up having to get a second mortgage.

Regards
Mike

In addition, do not get involved with subprime lenders.Some will raise your alredy high interest rate,even if you are late with a payment by one day.

I have heard of people having an interest rate of 9%,with a subprime lender,then after being a day late,within the 15 day grace period,have the interest rate jump to 18%. READ EVERYTHING THOROUGHLY!

Pay everything off and on time,your FICO score will take care of itself.

Try to get your credit score as high as you can. Last year I attempted to get a pre approval for a home loan, they quoted me 11% on an interest only loan !!!! My "middle FICO" was 620!
Of course I declined the offer and am working on pushing up my scores so I can qualify for a conventional loan.
Stay away from those interest only loans as well, unless you're sure your income will qualify you when you refinance...

Help03

You should probaly shelve the idea for now. Maybe you can try in earnest in a year or so when your score improves.otherwise, you're going to get boned by some subprime lender. No mortgage is worth that!

I agree Roadwarrior, I decided to wait one full year and really work on getting my CR cleaned up! It takes several months to show reliability, but those dings sure show up right away and can ruin you.