Trying to Buy a home and Frustrated!

[Anonymous]

Our FICO score is not great. 640 or so. We are working with a financial planner who is going to help us get into a home. However, he isn't going to do much until we find one we can afford. Almost there. We are trying to raise our FICO score and get our cards paid down. Our planner will rearrange our debt (probably roll it into the home) and come up with a plan for us to pay it off. In the meantime, we are stuck. We have 3 derogatories (late school loans) and we tried to get them removed, but they denied us. The only other thing we could think of was to try and raise our credit limits to decrease the debt being used on them. That didn't work either. So...would it be totally irresponsible and outrageous for me to open a card in my name and transfer a percentage of my husband's cards into my name?? We are going off of his score only. Other ideas would be great. Should we try again to get the derogatories removed? Thanks

[Anonymous]

First off your scores aren't that bad a 640 can get you into prime catagory assuming everything else is in line.

The best advice anyone can give to you is  patience.   The worst thing you can do is to rush into this. Work on paying down your credit card debt and lowering your utilization.   This will go a long way in not only improving your score but it will help in lowering your  Debt to Income Ratio.

Your  Debt to Income Ratio (DTI) is something you have to be just as worried about if not more than your credit score.   So work on getting that down below 30% below 20% is ideal.  

Increase your savings, and your savings for your down payment.   The larger the down payment the better the options will be available to you.

Again  patience and don't rush into it,  make sure ALL  your bills are caught up, not just your credit cards and such but all your utilities bills as well.   Increase your savings and other reserves and lower your DTI and you'll be just fine.

Hmm the money you are paying a financial planner could be money well spent somewhere else : )   Just food for thought

[Anonymous]

Thanks so much! We just don't have room to save much. Our FP is free for now. As soon as we get a home, he will rearrange our finances to make more room monthly (as well as put us on a budget). We are hoping to do an AITD/wrap around loan to get a house, however, everyone owes to much on their homes. So, we are hoping to improve our fico scores and get a regular loan. Thanks