[missstephanied21]

Me and my fiancée are looking into buying a condo within the next couple years. Neither of use has ever owned property before, but we're both very handy and our looking for a "fixer upper". Our issues are:

1. Poor credit
2. No/little down payment
3. Outstanding debts (we're looking to consolidate our debts)

Now, should we "rent to own"? Just suck it up, pay our debt off, then save for a 5%-10% down payment and apply for a mortgage the old fashioned way?

How do we go about buying anyway?
He is a veteran and is qualified for the government home loan, should we use this?

PLEASE HELP! :confused:

[ScottGem]

You best bet will be building up a big enough down payment to ensure enough equity to limit the lender's risk. If you are only borrowing 60-70% of the value of the property, the lender will feel, they will be able to recoup the loan in case of foreclosure. I don't think you have enough time to repair your credit to the point that a smaller down payment will fly. So builiding up your savings is your best option.

[jillianleab]

Scott has some great advice. If you consider doing a rent to own, be very, very careful. A lot of the deals I have seen benefit the landlord and screw you, the tenant in a very short period. It takes time to repair your credit, and many rent to own deals allow tenancy for maybe a year, which may or may not be enough time to correct your credit. They also often require a down payment from you, which may or may not (usually not) be refundable at the end of the contract term.

Also be wary of debt consolidation companies; most allow your accounts to fall into collections and then they contact your creditors and attempt to negotiate a payment. You can do that on your own, without ruining your credit even more.

Have you contacted a lender to see what you can currently get approved for? I've known several people who thought they were in worse shape than they really were. It can't hurt to make a phone call, after all! Good luck.