So let's just say American Express and Visa aren't beating down your door. That's a nice way of saying - you've screwed up.

Fear not.

If you've had credit problems, or have difficulty proving your income to a lending institution, there are still ways to buy a house.

First off--bankruptcy. Yes, it stays on your credit record for ten years. Yes, you couldn't declare bankruptcy again for seven years.

But the good news is that when two years have passed since the discharge (not the filing), most mortgage lenders will ignore it. Sometimes lenders will overlook it even earlier than that, if you had a good credit record until one financial disaster that wasn't of your own making.

If you have judgments against you, paying them off helps clear your credit record. You'd have to do it anyhow, before you could place a new mortgage.

There's no need to send money out of town to companies that promise to fix up your credit record. There are no magic remedies out there, and you'll only waste money you can't really spare.

The place to go for skilled assistance in solving money problems that have got out of hand is the non-profit agency known as Consumer Credit Counseling. To find the name of a local office, call 1-800-388-CCCS. They can work with your creditors, guide you through the process of repairing your credit, and tell you when you're qualified for a mortgage loan. They can even go to bat for you with mortgage lenders -- and all for nominal fees.

Another resource is the various federal and state programs aimed at buyers, particularly first-time buyers, with less than perfect credit. Some offer you special mortgage programs after you've taken courses in money management.

For the self-employed who have no W-2s to prove income, most lenders will accept instead two years' past income tax returns. If your down payment is high enough, there are even a few mortgage plans out there that require no proof of your income: no-doc (no documentation) or low-doc loans.

Some mortgage brokers can guide you to mortgage loans specifically intended for borrowers with less than A+ qualifications. You'd be charged higher interest rates, but with rates in general as low as they are these days, you might find something you could handle.

And I wish you good luck!

Published: March 11, 1999

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