I have a couple of questions, maybe some of you guys & gals with the forum can help me out with this one. Here is the sernario, First off I am thinking about buying a condo. I am 23yrs old in college and I am tried of paying rent. Recently I have seen this new condo for about 120,000. and wondering in my position would it be a waste of time to apply for a mortgage for this townhome. 1.) Is there a certain amount of income you have to have to get this on a 30yr term(Right now I am making only about 30k yearly working part time. Expecting to make more after graduation because I will be working full-time ) I would be able to put 10k down. 2.) What lenders look for? 3.) Any mortgage company that lend to people with special credit? (My credit scores are 575, 505, 485 very low scores, I am currently working to improve) I have about 6 charge offs from 1997 due to fall off in 2-4 yrs, I do have a couple of positives on credit report from short terms loans from school I paid off which seemed to help my score but it only reports to one agency. And two credit card accounting in good standing in which I have had for 2yrs. 4.)Any mortgage informational websites or mortgage forums? 5.) For mortgage rates what are % rate for people with poor credit? I have seen Any input & responses will be welcome & helpful thanks
There are several calculators you can use to see what you can afford, but I don't think 30K will do for 120K home. Just do a search on google for mortgage caluclators and you will find a ton. You stated you have 6 chargeoffs, "MOST" lenders will reuire these to be paid prior to mortgage approval The normally take your middle score which would be 505 that is kinda low, and you will probably have to pay over 10% and need a hefty down payment. You may want to try and dispute and hope you get lucky and get some itmes removed.
Don't waste your time - work on fixing your credit. All of your chargeoffs will have to be paid, or otherwise removed, with good credit you could get 7% - payment =$731.83 (that's financing 110k) - with a low fico, you'ld be lucky to get 9.5% = payment $924.94, and the sharks will want more than 10% down. run the numbers yourself here: http://accesshome.net/tools/calculator.html http://www.eloan.com/s/affordability/calc_afford?
I agree with others here. You need to get your scores up. A good way to go would be to get those charge offs removed from your reports using the techniques on this board. Are these charge offs revolving lines of credit such as store charge cards or credit cards? You may want to start a plan of action to get these removed or at least showing up in a more positive light. This will increase your scores astronomically. One collection account can drag your score down 50 points or more, so keep this in mind. Also keep in mind that the type of sub-prime lendors that deal with folks with bad credit scores will empty your pocketbooks with junk fees and higher interest rates..Start right away obtaining lines of credit with your local banks. A good way to go would be to take your 10G's to your bank and ask for a secured loan for that amount. Tell the loan officer that the low interest rates constitute your reasons for borrowing against your funds. Most bankers can understand this and will give you the loan. Some bigger institutions will insist that you have good credit scores even for a secured loan. Shop around with small town banks that will do it for you. Be honest and upfront. Repeat this process at 2-3 different institutions with the money borrowed at the previous bank. Pay these loans off quickly 3-6 months and make sure that they report the loans to the CRA's. Make sure that there are no early pay off penalties for your loans. Seek out credit unions first, they seem to be more lenient with early pay off penalties and bad scores.... Good luck!!
All of my charge offs are primarly from credit cards except for 2 utilities charge off one paid the other unpaid from the same company. I am not wanting to re-age these accounts by paying with no deal in it for me. I think it would make matters worst in the long run. I think I will wait it out other 2-3ys when half of these accts will fall off my credit report. Also by then I will have more positives added to my account to increase my score and better enhance my credit report. Also by then I probaly would want to apply for a mortgage loan that is offered within the company I work for. They offer the mortgage rates lower than standard rates for employees. I have another question maybe someone could answer for me. 1.)If a company does not want or are not willing to delete information from credit report in exchange for a payment. Is there any other options you can ask for to make the account appear neutral on credit report instead of a negative effect?
I thought charged off debts had to show a zero balance.]Originally posted by bailey [/i] You stated you have 6 chargeoffs, "MOST" lenders will reuire these to be paid prior to mortgage approval [/QUOTE]
How can one be paid and one not paid??????????When something is charged off the balance is zero. How in the world can a $0.oo balance be charged off??? ===================== The answer here is don't pay it - if they want the money they will deleate it! Don't fall for their bluff!
Do you know what a charge off is exactly???????? Just b/c a credtior charges off an account does NOT mean your balance is zero, it is only zero if you PAID it off.
[/QUOTE] Looking at hubby's report and they say recent balance $XXX and under status detail it says charge-off month/year. that's experian Equifax Balance $xxx status is R9 r revolving 9 charged off to bad debt I'm sure everyone knows this already, so I am not trying to come off as a smarta$$. Just that credit reports state this!
If you paid the account off -then how could there be a charge off? What's left to charge off after you've paid it? I'll admit I'm sorta confused about charge offs,hence all the questions.
zero balance IF they are paid, if not they show the balance. [/B][/QUOTE] ==If ther is still a balance after the charge of then it wasn't really charged of was it? What about the account changed from the charge off if anything???
lbrown59, No, it shows up as two seperate charge off from the same electric company on all my credit reports. One of them shows zero balance which I pay to get lights turn on from a disconnection but it is still listed as a charge off but has a zero balance. The other one has a balance in which I still owe them for after I disconnected the service because I moved to another state. I want pay it and try to get it removed from my report. i guess I am out of luck with the other one because I already had paid it.
You're not necessarily out of luck with the paid charge-off. I had a Chase $792 CO in college. I refused the settlement offer; instead, I continued paying till the balance was $0. That was in 1995. In June I wrote to them saying that they incorrectly reported the CO balance to EQF. A Chase credit bureau update dept rep called me & said she'll correct it, but the negative will appear till the 7 years are up. But the next letter I got said they removed it entirely from my credit report! As a result, my score went from 636 in May to 698 this month. The CRAs & even the FTC website harp on the 7 year penalty, never even suggesting the lender may be willing to amend or remove the entry altogether. That's what I like about this site. You learn things about the system that are to your advantage, but nobody in the lending industry would want you to know.
Rina is right on the money.. The FTC, the credit reporting industry and the collection industry would like us to believe that there is some law that requires information stay on for 7 years. There is no such law. No requirments for the 7 year rule. The law plainly states under the FCDPA and the FCRA that negative information can only remain for 7 years (exceptions, public record info such as bankrupticies, judements etc..) ...Show me any law in any states that forces anyone to report information to the credit bureaus... Back in 96-97, Clinton helped enact the Federal Student Loan Rehabilitation Program, allowing debtors to repay and change there loan history.. It is a forgiveness program much like an Offer and Comprimise to the IRS... Rehabilitating your credit or eliminating erroneous information is never illegal...
Even though you want to repay these debts, you realize that if you do, you will re-age the debts. The industry is no longer allowed to re-age debts, but they may try to do so illegally at times. This is a catch 22 if you ask me.. Of course you want to do the right thing, but your hands are tied because of their unwillingness to comprimise. Since they are unwilling to deal with you on a mature level you should play hard ball with them and ask for validation of the debt. They will probably come up with absolutely nothing. When they decide not to prove you owe the debt after some reasonable attempts (using letter writing techniques only). This will give you the ammunition to get yourself out on probationl from your 7 year credit, jail sentence. A good follow up after there refusal or inability to validate the debt would be a phone call to your states utility commision or the attorney generals office...
just my 2 cents but as far as i understand the law concerning how negative items are to be reported. it says that ALL information reported must be accurate. it does not say all information must be reported...secondly it also says that a negative item may be reported NO LONGER than 7 years they can remove it anytime they want basically. watch out for anyone trying to tell you anything different
Well, strictly in accounting terms a charge off is when a business writes off a debt on their taxes. You see, most businesses operate on an accrual basis - that is when a debt is incurred (the moment you owe them money) they report that as income. Say they report that you owe them $1,000 in the year 2000. On their taxes, they have to report that $1,000 regardless of whether or not you paid them. Now, after a certain period of time (depends on the business) a business will 'charge off' the income by taking it as an expense on their taxes. So, say for example they are eligble to charge off to bad debt after 6 months and so they can take as a tax deduction in 2001 the $1,000 in income that they paid taxes on in 2000. Now, that doesn't necessarily mean that you don't owe them the money or that they will not collect it. It's just an accounting term for being able to write something off on your taxes. Now, if you do pay it... they will have to report it as income again in the year you actually make the payment - along with any interest or late charges they've added. But, they can also deduct from that the cost of collecting the debt. You might have seen that some businesses (ca's) will put a disclaimer about how you might owe taxes (form 1099) if they have reduced a settlement for you. Debt forgivenss is considered income to you and they are writing it off on their taxes as an expense Sneaky, eh? Now, of course, all this doesn't amount to a hill of beans regarding a credit report. But what SHOULD happen is.. if a charge off is reported it simply means that the business has recovered what ever income tax it paid on reporting income it didn't receive - and what ever balance it thinks it accrued. A paid charge off should have a balance of zero and simply indicates that it was income.. then expensed (charged off) then counted as income again. Assuming you're still awake after all of this, I hope it helps. Myschae
Thanks for the Info. I guess what has me confused about charge offs and balances is The following.========== --------------------------------------------- I got a letter from a CA demanding payment for a phone bill. The day I got the letter I asked the phoneCo.for the balance and was told it was $0.00.I asked them a week later and they said it was $56.08. How can there be two different balances on the same charge off? That just don't make any sense! ~~~~~~~~~~~~~~~~~~~`````````
