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For a lender to approve you, all borrowers on the loan must qualify. Since your mid score is 540, you wouldn't qualify- and the loan would be declined, even though your dad would also be listed as a co-borrower.
Your best bet is to work on clearing up the old collections (pay for deletes)- that along, with paying off all the credit cards, will put you in great shape. Check out the credit forum for some tips on dealing with old collections.
Unfortunately from what I know, both borrowers have to qualify credit score wise. The only time a co-signer is really helpful is when there is a problem with the income for the main borrower.
@Sunshine85 wrote:For a lender to approve you, all borrowers on the loan must qualify. Since your mid score is 540, you wouldn't qualify- and the loan would be declined, even though your dad would also be listed as a co-borrower.
Your best bet is to work on clearing up the old collections (pay for deletes)- that along, with paying off all the credit cards, will put you in great shape. Check out the credit forum for some tips on dealing with old collections.
Or just have your dad buy the house on his own and then have the title in both of your names.
FHA allows a non-occupant co-borrower. Are your scores FICO scores or from somewhere else? You might not be as bad off as you think if you are looking at FAKO scores.
Wait until the zero balances are reporting then pull your scores again. Ideally you want to have all open cards reporting zero except one and it is to report less than 9% of your credit line. If you have closed cards with balances those need to report zero too.
Do you have charge offs with balances and collections with balances? Those balances will add to your utilization too. So if you can get those removed with a pfd then your score should increase. Having said that, the rebuilding forum will give you much more detail on how to remove those collections so check there first.
Also if your father buys the house as an investment property, you can rent from him until you can increase your scores to qualify for a mortgage on your own.
You don't need 25% down for investment properties. Generally you (your father) can get an investment loan for 20% down.