Getting a mortgage with mediocre credit?
Find a Conversation
| Sun, 02-08-2009 - 10:23pm |
Is it possible at all these days? We've been hearing about banks not lending to anyone who doesn't have spectacular credit. Sooner or later we're planning on selling our house and moving closer to DH's job. I don't think that getting ready to sell the house is really a priority for DH so I've pretty much given up for now. That's an entirely different issue, though.
Anyway, right now our credit scores aren't that great. A year ago it probably would have been OK, but I'm not so sure now. We're making an effort to pay everything on time and pay down debt but know it will take time to get our score up.
The things we have going for us are we should be able to get enough for this house when we sell to pay off all of our debt and have a 20% down payment. We're also eligible for a VA loan if we can't get a traditional mortgage. Considering there's a house in our neighborhood that had been on the market for over a year and the last one that sold was on the market for about a year before they sold it for a lot less than the asking price (rumor has it they were facing foreclosure), I'm assuming it will take a while to sell our house, so that will give us more time to improve our credit, but I'm worried about it now because the sooner we take steps to improve things, the better.






I don't know if what I am going to say will help you. But it has helped us a lot in our score. First I didn't try to pay off the bills I tried to get them down to 30% of our limit on a card. That has really helped us on our score. It has went up about 50 points in less then a year.
The 20% down is great That will help you.
I'm interested in this topic as well. My husband's employer is talking about forcing furloughs and/or pay cuts of more than 10 percent -- one rumor was 18 percent. This is the same place that laid me off 18 months ago so I know it is real. My free lancing is finally picking up a bit but still nowhere close to what I was making. We were just barely treading water using every penny of my husband's salary (and still losing a little money here and there some months) with a lot of credit card debt. Now this. I think we, too, will have to sell our house. The mortgage is much, much too high for our current situation. I also thought about refinancing but I worry we would qualify for that. There is some talk in Washington of giving homebuyers a big tax break so this might be a good time to bite the bullet.
Still, it breaks my heart in that I really love this house and area. If we could find another one in the same neighborhood I think I could get my husband on board with the idea since he is less interested in the house than the location. I've been thinking of calling our real estate agent to talk it out with her. She's a good friend so she knows our situation.
We should have more than 120K in equity but I just don't know anymore. We've always put 20 percent down and even with our high debt load we have been able to easily qualify for a mortgage on our salaries. Now we would have to qualify on his alone which will probably be reduced. I'm not sure we can. I thought about getting a part-time retail job somewhere just to prove some steady income but even those jobs have disappeared.
I think the advice about staging is huge. Even before it became a big trend I have always de-cluttered, touched up paint and gone through the house with a very critical eye looking for things that needed to be done. One time we even had a real estate agent go through and make a list of "chores" before listing our house. We have never had a house on the market more than two weeks. The first house we sold we got full asking price in less than a day. I don't feel anywhere near as condfident this time around.
There is a really good article in Feb. Good Housekeeping magazine about a couple who came close to losing their house when they both went into business for themselves. They finally gave up trying to hold onto image and what they thought they had to have and bought a cheaper house. They were a lot happier.
Anyhoo, I'm open to suggestions as well.
Jenny
The only other house we sold was in CA during the housing market explosion and we sold it in less than a week. I'm a lot less confident now. We have a pretty good idea of what needs to be done with the house, but of course, that all takes money, which we don't have.
we were told when we sold our last house (in a good market) that it doesn't matter what the housing market is doing. If you price it right, it will sell. I wish I were more confident in that being true.
I hear you on needing money on improvements so you can sell your house to get money. What a vicious cycle. We have a half renovated master bathroom that still needs a new shower stall and tile work on the surround, a couple new windows and our carpeting in the upstairs is pretty sad. All in all it would take about $5K. if we had an extra $5K laying around we wouldn't need to sell.
I am sort of waiting to see what will come out of Washington and see if there are any breaks for homeowners. We're also waiting to see when the shoe will drop on my husband's job. We are leaving Wed. on a prepaid, non refundable trip to NY (paid for with cash at least) for the family. I feel like my life is repeating itself. Eighteen months ago we went on another family trip (also non refundable) with the cloud of lay offs and reorganization over our heads. Everyone said just go and don't think about it. I, of course, worried the entire vacation with a very bad feeling. The day I got home I was laid off. Now we are leaving under another cloud waiting to hear how bad the pay cuts will be.
Man, this sucks.
Jenny
You all are lucky you are not in Michigan!
Northkountry
There maybe something coming out to help you guys So hold on as long as you can. I did a posting on what I heard it ended up on the "more" page Carol said something about too. Maybe you guys should look it over
Mary Ann
There maybe something coming out to help you guys So hold on as long as you can. I did a posting on what I heard it ended up on the "more" page Carol said something about too. Maybe you guys should look it over
We have a mortgage that we can afford. It's a 20 year fixed at 5.5%. The problem is that we've been struggling and we have some late payments, etc., so when (if) we move I'm afraid we won't be able to get a good deal, if we can get a mortgage at all. For now we're just going to keep chipping away at the debt and make sure we pay everything on time.