Can I get a mortgage with bad credit?
Post date: June 18th, 2011Last time I checked my score was a 620. I have enough to put half the purchase price for down payment on a house is it possible to get a loan for the other half I do not care what the interest rate would be because I make enough money to pay above what the monthly payment would be to pay the loan off faster and I only want the loan for 15 yrs. Either way the payments would be cheaper than rent at this point. My credit has charge offs and write offs due to a lay off 8 yrs ago which caused me to lose everything. Paying back the debt is not an option because I consulted with an attorney about filling bankruptcy which I was unable to do because I had to much in liquid assests and he told me not to file,and not try and repay the debt (1) because I would go broke trying and that is stupid,and (2) because they have already been written off which means they have filed it as a loss on taxes so it would be double dipping . The main thing that shows up on my credit is a repo from 8 yrs ago it was auctioned off and they have never contacted me nor came after me regarding any excess amount owed but it still shows up on the credit report as well as all the other crap I lost. I was under the impression that after 7-10 yrs all the stuff is supposed to come off your credit anyways,so why is it still showing everything from the beginning of my credit history to now? some of the stuff is 10 yrs and older(older being the good payment history) I even got a credit card to start a payment history a yr ago and that was how I got my credit score up to the 600’s it was worse. I just want to purchase a home I don’t want to be stupid and buy up a bunch of other stuff on credit I just want to get a house , and pay cash for everything else that way if something were to ever happen again and I lose another job I will never be back in the position I was in before. Is it possible to get a loan with my credit history if I pay for half the value of the house up front?
June 18th, 2011 at 5:11 pm
>>Last time I checked my score was a 620. I have enough to put half the purchase price for down payment on a house is it possible to get a loan for the other half I do not care what the interest rate would be because I make enough money to pay above what the monthly payment would be to pay the loan off faster and I only want the loan for 15 yrs.<<
Ok..first things first. If you have a 50% down payment, and your debt to income ratio is low enough, you can probably get approved for a mortgage.
Now…on to the rest of your question:
>>My credit has charge offs and write offs due to a lay off 8 yrs ago which caused me to lose everything<<
Are you sure it was 8 years ago? If so, then none of it should be on your credit report. Negative items are only supposed to stay on your credit report for 7 years after they are charged off (which is typically 180 days after they go delinquent). So, most of it should be off of your report..if not, it should be falling off of your report in the next 6 months or so.
>>I consulted with an attorney about filling bankruptcy which I was unable to do because I had to much in liquid assests and he told me not to file,and not try and repay the debt (1) because I would go broke trying and that is stupid<<
I’m curious about this part. You would go broke trying to pay off your debt, but you were able to save up a 50% down payment on a house, and you make enough to pay it off in less than 15 years? Something about that doesn’t add up.
>>and (2) because they have already been written off which means they have filed it as a loss on taxes so it would be double dipping<<
That lawyer is either an idiot, he doesn’t understand business, or he’s lying to you. If you owe them $1,000, and they charge it off, they get to deduct that $1,000 from their profit. So, they don’t pay tax on that $1,000. So, they save around $200-$300. If you pay back the $1,000 after they write it off, they are required to report that, and add it back into their profits, and pay the tax on it. So, paying them back doesn’t mean they are double dipping. It simply means that they are getting the money that you promised to pay them.
June 18th, 2011 at 5:11 pm
Why not just see if you can get pre-approved with a lender?? Then you will know EXACTLY where you stand!
June 18th, 2011 at 5:11 pm
Unfortunately it is going to be really hard to get a mortgage at this point for you. First of all, your credit score of 620 is not good enough for a bank to approve a mortgage. But beyond that, you have a lot of unpaid debt. I actually think you got pretty bad advice from your attorney. Just because debt is charged off, does not mean that you can’t repay it and have your accounts marked paid in full. Even though my sense is that your score would hurt you, bank prefer to see paid off accounts rather than charged off accounts. A charge off is still a debt that can be sold or collected. That means someone can sue you, get a judgment and then garnish wages or attach property. Banks do not want a secured interest in a home that is at risk of being attached. Sorry that news is not better.
I’d also question your statement about interest. It is not true that high interest would be cheaper than renting. High interest rates simply mean more profit for the bank. If you borrow 75,000 the difference between a high interest rate and low interest rate could be $500 – 750 per month. It doesn’t cost THAT much to rent a 75,000 house. my suggestion would be to rent and settle these debt issues. Once your credit is better take your pile of cash and go look for a home.
June 18th, 2011 at 5:11 pm
I think you should fix your credit before applying to the loan. I used this servise to increase score before getting my home loan – 3credscores.xp3.biz