Posted on: 25th Jun, 2010 04:03 pm
My husband and I would like to buy our first home, however, we both have bad credit, in the mid-500s. Is there any loan that we would be approved for? My father, who has exceptional credit, is willing to co-sign. Will this matter? What loan will be the best for us with our poor credit, low down payment, but a willing co-signer with excellent credit.
A co-signer does not negate bad credit. Even with a strong co-signer you will still be unable to qualify based on your credit score. If you could bring your score to a 580, there are options with an FHA loan that are still available, though at a higher rate. If you get to 620 then you will have better options, a 660-680 will start yielding better rates and at 740 you would qualify for the best rates. Set a target and start working on your credit scores to get where you need to be.