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If my credit score is...Can I get a home loan?
My credit score is a measly 600. I accept responsibility as a stupid teen who knew nothing about credit scores.

My husband and I would like to buy a house that costs $65,000, we can put down about $25,000.

However, we are $48,000 in debt (school loans, plus $1,000 on credit card for washing machine).

Can we still get a loan?
What rate do you think we would get?
Should we save for a bigger downpayment, or use our downpayment to pay off debt and wait to buy a house?

We hate wasting money on rent, when homes are so cheap and beautiful in our area and rent is double what a mortgage costs.

Please help!

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What are the interest rates on your student loans? I would take $1k of your savings and pay off the credit card. Keep the rest in savings as either your emergency fund or earmarked for your downpayment.

While 600 isn't a "bad" score (you're average), you're likely not a prime applicant for a mortgage. This doesn't mean you wont be approved, but you will likely have a higher interest rate and have to pay PMI.

Have you taken a look at your credit report(s) recently to see what's reported? You should do this every year and dispute any inaccuracies with the bureau. This can be an easy way to get points (note they'll only make changes if there are, in fact, errors). Then look at accounts in collections or other derrogatory marks. While I don't personally have a mortgage, I've heard that most lenders insist on you having ZERO accounts in collections, so this is another place to work on. You might have to use some of that $25k to clean this up, but it will be worth it in the long run. A few points of interest can mean tens of thousands of dollars added to the life of your mortgage.

If you don't have any accounts in collections and you're up to date on all of your cards, then you have two choices, wait and use your credit responsibly to build up your number and continue to save towards your DP/efund, or apply for a preapproval to see whether you qualify and at what interest rates. Personally I'd opt for option 1 and continue to rent. While yes, you don't gain equity in renting, it isn't cost ineffective. While renting you're not responsible for maintenance, homeowners, taxes and the many other expenses involved with owning a home. Instead of building equity you get to put $ in the bank, which is equity in and of itself.

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