Poor Credit Refinance?

Well; Since the reverse mortgage is probably for more than the property is currently worth if it holds true to every reverse mortgage- estate situation I've seen,. you really aren't going anywhere here without a big down payment and a co-signer

Sorry to hear about your grandma's passing. Your circumstance would have been the same regardless of what type of loan your grandmother had on her home. The only way to keep the home is to refinance the loan into your own name. The lender has to be paid.

The good thing about a reverse mortgage is that if you are working with them and making a good faith effort to refinance or sell, the lender will give you 6 months to do that, and if needed, can give you two 3-month extensions for a total of one year. Just remember that interest will continue to accrue each month until the loan is paid off.

I don't have any lenders to recommend but they are definitely out there. Use the internet. The good news is that you are almost at 80% LTV so that if you can bring enough money to the table, you may be able to refinance without paying MIP (that is a major expense for any FHA loan or loan less than 80% LTV).

There are also some government first time home buyer type programs you should check out, for folks with low FICO scores or help with credits for closing costs. They may be Federal or even local City and County programs as well. Some agencies can also help you clean up your credit score.

Be very wary of a lot of scams out there. If someone is asking you for money up front, or promising what seems too good to be true, it probably is a scam. If they are legitimate, they shouldn't be offended if you check them out.

Also, be careful about giving out your SS # to whoever promises you they can help you. Every time your credit is pulled, it will bring your score down. Many will promise everything to get your business (and they all seem very nice), and after 1 or 2 or 3 months of stringing you along, you will find they can't do it. I would suggest you pull your own credit report (you can get one free a year at www.annualcreditreport.com) and pay for your FICO score and offer a copy to them (without the SS#) so they can make you an offer, with your realization that there is no guarantee until an application is signed etc etc. If they are serious and it looks likely, then they can run their own reports.

It may mean you don't get the best loan out there now, but in a year or two, if you make a concerted effort to clean up your credit, you hopefully can refinance into something better.

Or, worst case scenario, you sell the home and have a nice down paymentt for something a little smaller. Now is a good time to buy.