Money Matters

Re: How do I fix this?

amor_eterno — Tue, 07 Jul 2009 01:07:35 GMT

FutureMrsTeichroew:
An FHA loan requires 3.5% down and a minimum credit score of 620. And their rates are often times better than conventional. We got a rate of 4.85 on FHA, and we only put down 3.5% down. We just knew to buy a cheap enough house that we could afford. But anyways in January my husband had a credit score of 580 and raised it to 680 in just a few short months, during that time, we payed off a large credit card, payed his bills consistantly for about six months time, and used a credit restoration service that sent letters to all the credit bureus and stuff and if there is any errors in how the information was reported they have to remove it, so they did get a few things removed from his credit score that way. So Good Luck and hang in there!

ITA! I did this and it raised my score so that we were able to qualify for a loan. My only advice is that after you go through all the trouble to clean your credit, really take a look at your spending so you don't make the same mistake again. GL!

Re: How do I fix this?

Kaiene — Mon, 06 Jul 2009 19:41:13 GMT

My credit score is only slightly higher than yours (thanks to poor CC use in college), and my H and I were approved for a loan.

Here a few suggestions:

Use cash or debit card - if you don't have the $, you can't buy it. Also, using the debit card or cash more will help keep your debt to credit ratio low.

Pay extra each month if you can on your debts. I pay $120/mo on a student loan even though the required payment is only $50ish. More of my money is going to principal every month. It really adds up after a while.

Design a budget where you pay yourself first - it's hard, but it's very helpful!

When you think you are ready financially for a house, try simulating a mortgage payment by putting extra money aside each month. For example, H and I pay $1000 for rent. We put an extra $400 in savings each month as if we had a mortgage. This way, we could see if we could handle it, and it also padded our savings!

Re: How do I fix this?

LaLaLisa — Sat, 04 Jul 2009 01:15:17 GMT

Hang in there. You've learned your lesson and won't miss any payments - or even be late on anything - from here on out. I, too, had really bad credit and I have recovered. So will you.

Save as much as you can, too. The bigger the down payment the better.

Re: How do I fix this?

FutureMrsTeichroew — Sat, 04 Jul 2009 01:07:06 GMT

An FHA loan requires 3.5% down and a minimum credit score of 620. And their rates are often times better than conventional. We got a rate of 4.85 on FHA, and we only put down 3.5% down. We just knew to buy a cheap enough house that we could afford. But anyways in January my husband had a credit score of 580 and raised it to 680 in just a few short months, during that time, we payed off a large credit card, payed his bills consistantly for about six months time, and used a credit restoration service that sent letters to all the credit bureus and stuff and if there is any errors in how the information was reported they have to remove it, so they did get a few things removed from his credit score that way. So Good Luck and hang in there!

Re: How do I fix this?

jen-n-jess — Fri, 03 Jul 2009 22:50:34 GMT

This website tells you how to take charge of your credit, lots of information: http://www.creditfairy.org/.

Good Luck!

Re: How do I fix this?

fwittig@gmail.com — Fri, 03 Jul 2009 17:03:39 GMT

dahl0646:
niuchick21:
kayt111:

niuchick21:
You only need a 580 to get a first time homebuyers loan and now you dont even need a down payment with some first time loans. not that I'm saying you shouldnt save the 20% and build your credit more, just saying its not impossible

What loan has that standard today? And what rate comes with it?

FHA loans I believe. Rate depends on a lot of things, but you can still get a pretty good one. There are a lot of things out there for first time home buyers.

Holy crap, that sounds like a dumb idea! No down payment when you already have debt and bad credit. Sounds like asking for trouble. I don't even want to know what our monthly payments would have been if we didn't put down 20%!

My new husband and I are in the process of buying a house right now and they brought this up. I have a lot of debt from student loans and credit cards and he has no debt but no credit either.

With an FHA loan, you only have to put down 3.5% and it enables you to have a higher debt to income ratio. But yeah, the monthly payments will be much more.

And don't forget about the First Time Home Buyers stimulus package, you can always try for it, even if you're denied, what could it hurt?

Re: How do I fix this?

CurbsideProphet — Fri, 03 Jul 2009 11:27:54 GMT

LateSummerBride:
I'm new to this so I didn't know how to make the facny box around the text I copied from another post...

Hit the quote button on the bottom right of the post you want to quote.

To the OP, I agree that it is just going to take some time. I would try to pay off any consumer debt such as credit cards or a car as quickly as you can. I probably would not be as concerned about student loans.

I also would try to save up for a 20% downpayment.

Re: How do I fix this?

dahl0646 — Fri, 03 Jul 2009 07:46:16 GMT

niuchick21:
kayt111:

niuchick21:
You only need a 580 to get a first time homebuyers loan and now you dont even need a down payment with some first time loans. not that I'm saying you shouldnt save the 20% and build your credit more, just saying its not impossible

What loan has that standard today? And what rate comes with it?

FHA loans I believe. Rate depends on a lot of things, but you can still get a pretty good one. There are a lot of things out there for first time home buyers.

Holy crap, that sounds like a dumb idea! No down payment when you already have debt and bad credit. Sounds like asking for trouble. I don't even want to know what our monthly payments would have been if we didn't put down 20%!

Re: How do I fix this?

LateSummerBride — Fri, 03 Jul 2009 03:45:09 GMT

"Borrow Suze Orman's The Money Book for the Young, Faboulous & Broke. "

I'm new to this so I didn't know how to make the facny box around the text I copied from another post...

Anyway, I agree. Her book has a lot of good information on this and you can probably get it at the library. As you are paying down your debt, make sure not to close any of your credit cards because they are helping you have a good debt to credit ratio (the amount of credit available to you and the amt of debt you have). Older cards help your credit rating even more than newer ones. Also, don't open anything else until you are set with your new home because inquiries can hurt your score.

Re: How do I fix this?

misssweettea — Thu, 02 Jul 2009 22:58:39 GMT

In addition the previous comments about paying down your debt and making a big down payment (20%), I'd say to also begin looking for a promotion, job or increasing your skills that will set you up for a job that will allow you to earn more money and bring home more income. I believe with all the foolishness that has went on recently to get people into homes they are now considering income again. Before they would give you a loan for a 250K house when you only made $30K a year. Also just remember to be patient. Good luck.

Re: How do I fix this?

niuchick21 — Thu, 02 Jul 2009 17:53:09 GMT

kayt111:

niuchick21:
You only need a 580 to get a first time homebuyers loan and now you dont even need a down payment with some first time loans. not that I'm saying you shouldnt save the 20% and build your credit more, just saying its not impossible

What loan has that standard today? And what rate comes with it?

FHA loans I believe. Rate depends on a lot of things, but you can still get a pretty good one. There are a lot of things out there for first time home buyers.

Re: How do I fix this?

MrsAngel2008 — Thu, 02 Jul 2009 17:08:24 GMT

When was the repo? Have you been good with everything else since? Collections items like this should fall off your report after 7 years (I was in a similar situation with my former fiance...I'm almost at the 7-year mark with that mess, I hope it really does go away soon!)

Re: How do I fix this?

kayt111 — Thu, 02 Jul 2009 15:22:35 GMT

niuchick21:
You only need a 580 to get a first time homebuyers loan and now you dont even need a down payment with some first time loans. not that I'm saying you shouldnt save the 20% and build your credit more, just saying its not impossible

What loan has that standard today? And what rate comes with it?

Re: How do I fix this?

niuchick21 — Thu, 02 Jul 2009 15:19:24 GMT

You only need a 580 to get a first time homebuyers loan and now you dont even need a down payment with some first time loans. not that I'm saying you shouldnt save the 20% and build your credit more, just saying its not impossible

Re: How do I fix this?

Jill7475 — Thu, 02 Jul 2009 00:53:01 GMT

Hope you fix your bills as soon as possible so you can avail that mortgage loan you want.