We live in South Carolina. Here are our credit scores: Hubby - Equifax 543 Experian 521 TransUnion 510 Mine - Equifax 562 Experian 585 TransUnion 515 We are currently looking to trade our mobile home in for a Palm Harbor Home with land. We were thinking of financing a total of $147,000. The only monthly payments other then the house we will have is $785. No down payment. DH makes $50,000 salary and will continue to get it. He has been in this field for 10 years. I bring in VERY minimal income! VERY MINIMAL! 401K is about $11,000 and its vested. Nothing in savings. Just had a baby. They need furniture and lots of other things. LOL! Stuff from the VERY past is dragging the scores. They are falling off as we speak. Just let a dead dog lie right? Very little lates in the past 2 years. Very minimal. More good accounts then bad. $785 is only for a car payment. Nothing else on the credit reports. Not including utilities. They are trading in my old home. They will more then likely just give me what I owe on it. I won't make anything off of it. That is all that I can think of other then the fact that I have been working for 2 LONG years on cleaning up my credit and believe it or not, ALOT has been dropped and deleted from my report. Other then that, that is it. We are trading in our home though. But I don't think that we will get more then payoff for it so no help there. What are our chances of getting approved? We are VERY hopeful and due to our family growing we really need a bigger place. For the last 2 year, in guidance with this site and others I have worked VERY hard on improving our credit. Things have gotten ALOT better on our credit. Honestly, what do you think our chances are for getting an approval for this amount? Please, can someone help us see where we stand so that I can satisfy my curiosity until the finance people actually look at it!! HELP!
I recently applied for a mortgage and when I started my middle score was about 520. (The mortgage companies usually take all three scores, then base their decisions on whatever the middle score is). I was told that because of all the recent forclosures and problems with the subprime market that it's getting to be very difficult to get approved at around 520. Since then I was able to get my middle score up to about 560 and I was approved for a 180K loan with 5% down and a 10.75% interest rate, however, for $5000 I could buy the interest down to 7.75%. I would also be required to pay $400 per month in mortgage insurance. If I put 20% down I won't need to pay the mortgage insurance (I'm currently looking for ways to do this). Your other option would be an FHA loan which doesn't get based on a credit score, but I was told that for this you shouldn't have any lates in the past year, and no lates in the past two years would be even better. FHA will still require 3% down, though. With those scores and the market the way it is I think you'll have a very hard time getting approved for 0% down. If you can manage to get 3% for the FHA or 5% or more for a conventional loan, then you might be able to swing it. Good luck, Brett
Thanks Thank you so much for your reply. The seller is paying down payment and anything else so I'm hoping to get approved. I feel better going by what you say that we will be approved. Its amazing how you can pay $5,000 and get a MUCH lower interest rate. That will save you $400 - $600 a month. That is a pretty good deal if you ask me. I do thank you for your take on the situation. It makes me feel good to know that there is a possibility that we might get approved. For the last two years I have worked so hard at improving our credit by taking advice from boards like these. So far things have gotten better. Our scores haven't gotten much better but we are going to need to keep our histories in tip top shape and we should be going good. Thanks again. If you think of anything else, let me know. Also, let everyone know how things go with your mortgage. It will be nice to see someone get approved and get their dream home!!
Not to discourage you, but this will be a "tight" call. At $147K, you're probably looking at a mortgage aorund $900/month, plus taxes & insurance, so let's say $1,000/month. Add your $785 car payment, you're looking at over 40% debt to income ratio (on a $50K annual salary). That ratio, with your credit scores is going to be difficult. I would advise trying to get the car payment down, that is a HUGE car payment. Also, see what you can do to get your scores up, in lending higher FICO scores allow higher debt to income ratios. See if the seller will work with you somehow on the financing ratio end. I'm sure there's a way to make this work, just try to cover all the angles.
Here is what they told me. Well, basically the guy at Palm Harbor Homes said that the person in their finance department said that it would be possible to go ahead and do it now but if I were to just wait until January, I could probably be able to get a better interest rate. He said that the way that the market is right now, finance companies are hesitant to lend money to people with my scores and they would ultimately give me a higher interest rate right now. Does anyone differ?
I agree with the broker; if you do secure a mortgage, I'm sure the interest rate will be higher. It may not seem like much, but it adds up significantly. If you can wait until January, use the time to work on your credit scores, this will help in all categories. Review your credit reports to try and predict what you will look like in January. You mention that a lot will fall off. Try disputing, and goodwill requests of removal for the others. You will have some luck, and some will come off, not all but some, be assured. This is a big purchase, you should put some serious thought and planning into it. Just ask any questions you may have, we're all glad to help.
I have been working on our credit for 2 years now. Trust me. I have done my research, disputed alot and made sure that all payments have been made on time in the last 2 years. We know that this is a big major purchase. That is why it has been so important to me. I have worked very hard and I'm ready to see that work pay off. I understand how big a deal this is. Right after they checked my credit and handed me my copies, I went straight to the computer and disputed what should NOT be there. 1 item will be deleted in Nov. 2007 and the rest in Dec. 2007. After that, there really won't be anything bad sitting there. But only time will bring up the scores.
If this is the case, then you should see a big jump in your scores when all of the negs fall off. It would be worth the wait. In the meantime, if you want to secure the new home, perhaps the seller/broker would accept a P&S Agreement dated for late January/February. Worth a try..
