Am I ready to apply for a Home Loan?

[redhouse69]

Ok I bought a house from my brother on a contract for deed in 2010.  100k house, 5k down, and 5 year contract with a balloon payment at the end. 

My credit score started in the low- mid 500s and now are 647 EXP 651 EQ  and 615 TA.  I am paying 7.5 %. 

I am wondering if I would qualify for a Refinance and if so what rate do you think I would get?  I've seen websites claiming like 4.8 % with fair credit... 

Worse case scenario is that I keep pluggin along and wait for my scores to increase.  Thanks to this site for helping me get on the right track to repairing my credit.

Thanks for the help

Michael

[boomhower]

If your last two years is clean and no unpaid judgements I don't think you'd have a problem with an FHA loan, likely at a rate less than 4.8.   FHA rates aren't based on score, either you qualify or you don't.

[StartingOver10]

Make sure you have a record of your payments to show you are making them timely.

Many of the lenders want to see the actual check or bank statement showing that the funds came out timely. If you have not been keeping those records, start keeping them now. In the last couple of years, the banks have really tightened up on this criteria so a letter from your brother won't work with most lenders. If you have been paying cash for the monthly payment, start paying in a way that is traceable.  Otherwise, you seem to be in good shape for an FHA loan from what you posted.