Nobody wants our money...Part 2?

This is my second post to this question, because after reading your responses I realized there is quite a bit of information that you need to give me a more precise response. So here it is...



In 2005 my then fiancee was in a no fault near-fatal car accident. He raked in over $200,000 in medical bills and was unemployed at the time, since he had just graduated from college. For some reason his parents had let his health insurance lapse under the assumption that he would find a job before he needed any medical treatments.



Since I had also just graduated, i was also unemployed so I decided rather then to find a job to help nurse him through his rcvoery. I returned to work in Sept and he in Jan of 2006. We began paying off what we could on our small incomes but his parents were not helping us at all, and my parents were doing as much as they could afford to, but we slowly began to fall further and further behind on our bills.



In August of 06 I began law school thinking that it wouldn't hurt us too bad financially since I had a few small scholarships and loans. But I was soo wrong. We again began to slip on our bills and even after we both picked up part time jobs, it was to late. I decided not return to law school until we were paid up on all our bills (and hope to finally return to school next fall). We were able to get his med. bills down to $23k, which is a big drop from the original $234k bill, but still a very large number.



We have been curent on our bills for over 12months and have been advised by all the mortgage brokers we have spoken to not to pay any more of his medical bills due to the amount of time that has past. There is no more money (that we know of) coming from his accident and we used what we did get from insurance to buy him a new car and pay some of the bills. We make decent money now, pay for everything with cash, but occasionally use our credit cards to show the creditors that are able to use them pay them off on time. We make fairly decent money for our age and that is how we are albe to put so much into our investments and savings. Oh and we have 2 cars paid in full. I hope this helps.





My original question is posted below, and thank you so much for your feedback, it is very honest but helpful.





';My husband and I are interested in buying our first home for approximately 130k. Our credit scores are both around a 530-540. We have 15k in savings, and decent 401ks and IRA's. We earn alittle over 6k/month but keep getting turned down for mortgages. When we were younger we made some very bad decisions and our credit was hit fairly hard, but we have paid ALL of the balances off. Why aren't we getting approved, and what do we need to do to move into our first home???



Please help...';Nobody wants our money...Part 2?
It doesn't matter what the circumstances are, with those credit scores, you will not be approved for a mortgage. You scores are going to have to be 620+.Nobody wants our money...Part 2?
easy; build the credit rating via time. STUDY, in law school,

the law of credit. The law of mortgages.



I will guide you.



instead of a 130k home, find one for 35k and fix it. Become independent

and I will show you how to use your skills differently.



Do not jeopardize your cash reserves.



email me
Unfortunately it seems that your credit scores are not going to allow you to get a conventional loan. Low 500's is about as bad as it gets for someone who is not in immediate financial trouble. Mortgage brokers, financial planners and even self-help books can help you raise those scores in the next few years.



Renting until you can raise those scores is not a bad idea; however, if you are set on owning a home (and taking on the financial responsibility that comes with it) you could consider some non-traditional types of financing. Get creative. Look for owner financing, especially if it's someone that knows you or will take references other than the credit unions. Consider a lease with a buy option where you rent the home you want for two to five years with the option to buy at the end of the lease. Usually part of your lease goes toward the down payment. In the mean time, raise your credit scores and be ready to buy when the time comes.
Pay your bills. that is the moral and ethical thing to do.



It is not about ';getting away'; with not paying



530-540 is way too low to buy a home. 675 would be a very minimum.

You can get there in 24-36 months by paying all your bills on time.



A 740-750 is what you need to get a very good rate. At 675 right now you would get a 7-8% vs a 4-5% with 750
stop fighting the system just rent til the credit scores go up then consider purchasing at that time.
You really only have a couple of options here.

1) Continue renting and working on your credit - this could take 2+ years.

2) Credit repair - 30-60 days.

3) I have a lender that will approve FHA and VA loans down to a 530 mid score but the rates are higher as this is a higher risk loan for the lender. It may also require 10% down to get approved instead of the normal 3.5% for FHA.