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Discussion in 'Credit Talk' started by Larissa, Aug 2, 2001.
Thanks in advance
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Please...anyone? I have an appointment to look at the place in a couple of hours and want to know what I am getting in for.
C4D-Contract for Deed
I've never actually done this, but there is some good information here:
Thanks Hal! I am just concerned about them wanting to pull a credit report. I know I can pay it...it is 350 a month and I have paid 545 a month for rent for 4 years now and never been late. I just don't want to get my hopes up.
They would take into account that it would be $195 less...IT'S A PLUS...but still not a guarantee...
Well I went and looked at the place, and it was ok, it does need some work, but when I talked to hubby on the phone(he is working out of town) he said that the price they were asking was way too much. The guy did tell me though that they would not do a credit check at all....all I would have to do is come up with a 10% downpayment and the place would be mine. But as I said, hubby thinks it is too much...it is a mobile home built in 96 and they are asking 36000 for it (which works out to 3600 down and 350 a month) I would really like to own something instead of renting, but don't want to fall into the trap of getting taken advantage of just because my credit is not good. I don't know what to do. My hubby wants me to start looking for somewhere else to live because of the rent increase...my son is very upset and keeps crying because he does not want to move...I know this is way off topic, but I am just so confused. If I knew for a fact I could buy a "real" house in a year, I would stick it out and wait, but I don't know that for sure.
Please email me at email@example.com. I know of a very good program, that may be able to provide you with some assistance. I am not affiliated with the program,but know others that have used it.
Have you checked your credit scores? You would be surprised at all the creative financing there is available. If you get your scores, talk to a real estate agent and level with him/her. Ask if they can get you into a house. If you have down payment money, it is a definite plus.
Although mobile homes are very nice compared to what they used to be, they still depreciate. Is the mobile on some land? If not, be prepared to again pay "rent" for your lot space.
IMO, a fix-er-upper house on a small lot would be a better value. If you and your husband don't mind doing some work, it's not too hard to really fix a place up nice. And, you can save a ton of dough by doing the labor.
I have not checked my credit scores as of yet...I got reports (free due to denial) from all 3 bureaus, but none of them have the score on them. I am thinking of signing up for EQs online thing once I have a CC (can only get secured, so it must be bad) since they are the one pulled the most here (I know a mortgage will pull all 3) When ELoan was all the rage I did that I it said I had a 601 and hubby a 612, so that is pretty bad.
We applied for mobile home financing with Conseco last year and were denied...I still have the letter, here is what it says:
*Revolving credit utilization too high (is this CC? We had none at the time)
*Too many inquiries(self explainatory)
*Insufficient time at present address (we have lived there 4 years)
*Insufficient time at present employer (hubby has worked for same place for 7 years, I was only at my job for a few months then, but now it is more that a year)
*Delinquency, derog public record or collection filed (we have 2 paid judgements, I have defaulted student loans in rehab, and I have gotten most of the collections deleted)
*High bank or revolving debt utilization (???)
*Number of accounts with delinquencies (2 cars with tons of late pays, both paid off now)
It doesn't meantion his chargeoff from 98 (I got mine deleted)
We also applied for a conventional mortage with Century 21 and their letter just says:
They (C21) gave me the impression that once my SL are out of default (Feb or March), AND if we pay the chargeoff AND all of the collections, they "MIGHT" reconsider us.
Right now we have no down payment (well about 1K) but come Feb will have at least 5K which is still not enough...it is tough to save when you are paying $600 a month in rent....
Well enough of my sob story...I am sorry this is so long
Mobile or manufactured homes differ from a regular home principally by the fact they do not appreciate in value. A normal home may depreciate depending on several factors (condition, neighborhood, current housing market, local economy etc.) but in general if well maintained and locaetd in a stable economic area will appreciate in value over time. A mobile home, on the other hand, is not much different from buying a new automobile. Once it is delivered, it immediately begins to depreciate. I have seen exceptions to this in some case if the Mobile home were purchased new and affixed to a foundation on a lot that you own.
This is a major factor in financing, as the lender is looking at protecting an investment over the long term. I agree that even an older "Fixer upper" home is preferable to a mobile home. Because of the depreciation aspect it is much more difficult to finance a mobile home with questionable credit.
In general, even with financing for a regular home, you will likely have to pay collections and charge off accounts. You might want to find a mortgage broker, rather than a conventional lender like a mortgage company or a bank. A good mortgage broker will sit down and reviwe your overall situation including your credit profile, income, length of residence/employment and is generally able to match you with a lender that will likely finance you. They are able to do this as they work with multiple lending sources rather than one or a few. Often they will also be able to advise you what needs to be addressed on your credit to help you obtain the best financing as well.
The program I previously mentioned is called Ameridream (http://www.ameridream.org) . This is a non profit charity established to assist in home purchases. They work with FHA financing and provide a "gift" of a down payment of up to 5% to help you qualify for an FHA loan. A portion of the proceeds can also be used to clear past debts in some instances. I know several families that have used this program and were able to purchase homes when they otherwise had been denied.
I wish you the best of luck.
Thanks for the info! I went to the site that you suggested, but found that there is no representative in my state. Also how do you find a home that is enrolled in the program? You still have to get approved for an FHA loan too right? The homes in my area sell for around 100K which I guess is not too bad since I have already paid 26160 in rent on a place that I will never own. If only I had that money in savings *grin* I agree about manufactured homes...the value does not keep...I would much prefer to own a regular house...I am not bothered by a little work, in fact I like to fix things up, as long as it is structurally sound, the electric and plumbing is good...paint, carpet, no problem, heck I can even shingle a roof!
What I guess I need to do know is to figure out what I need to do in order to qualify for at least FHA...the people at Century 21 were not very helpful...the guy I was supposed to be working with ignored all my emails, I ended up calling and talking to his assistant who gave me the info I meantioned before, but he didn't seem to sure about it.
I don't even know where to start. If I could just win a million dollars I wouldn't be having this problem.
Your state, county, and/or city should have a Dept. of Housing....they often will have special programs for first time homebuyers that have more lenient credit terms than conventional financing. I"m pretty certain that by now at least all the States will have websites so you could start off by doing a web search.
The good news is that the last 1-2 years credit history is the most important to mortgage lenders, the bad news is that from what I've read you will probably have to pay the collections and judgement.
The advice on the Housing Department Programs is also a very good tip. It is typical for local governments to receive Federal and Private grants to assist low income and credit challenged families in obtaining a home loan. I would check into this if I were you.
To find a mortage broker, look in the Yellow Pages and your local newspaper. Typically in the newspaper classifieds they will have adds like:
"Turned down for a home loan. We can assist you with financing. Even with bad credit."
Keep in mind if a mortage broker does obtain a loan for you, you will likely pay a slightly higher rate than you would with conventional financing; however, after 12-18 months of timely payments, it is not difficult to refinance at a lower rate.
You may want to contact Ameridream through Email to see if they can point you to someone who services your area.
I will check my state's web site (yes they have one, but I live in ND which is still firmly in the stone age, so I don't know how helpful it will be)
The judgements are already paid.
The only collections not paid are 3 where I have requested validation (twice in one case) and have never received a response...the stupid CRAs keep saying it saying it came back verified though...these are only on my EQ...most of the collections that are paid have come off after dispute, I am doing the last few now.
The chargeoff is about 3K...I will pay if I have to...I have disputed but it came back verified
I had a chargeoff that is now only on TU for 4K..it was deleted from the other 2...I am disputing with TU now.
The late pays are all pre 2000, but there are quite a few...
I found my state House Department web site. What I found is that they do not appear to have anything for people with bad credit for which I would quiliry...your income has to be below 20K a year. However they do have a first time homebuyers program which offers a 5% interest rate. My income is just pushing the top level for that...however...the way it works is that you get approved for a loan from a participating bank who then sells the loan to the state and then you get the lower interest rate...on the good side, my local bank who I have been with for 5 years is one of the participating banks. They also have a down payment assistance plan, but again my income is too high.
So....I am going to have to fix my credit to the point where my local bank will be willing to approve me for a loan I guess. The first part I think is to wait until my student loans are out of rehab...I don't think they will consider the fact that I am rehabing them, just that they are in default...does anyone agree or disagree with this? Then I will have to go and talk to someone at my local bank (I am afraid because I do not take rejection well *grin*) and then go from there...right?
Do I understand from your previous post that all of your negative info was pre-2000? If that is true you may qualify for an FHA loan now or w/in the next few months....they don't use FICO scores they just want to see a year to two years of no negative marks. Check out the the HUD website for info...
It stinks having to go in applying for something not knowing whether the loan officer is going to laugh in your face....I've been there...I was able to get a mortgage but still get turned down for credit cards! But I don't think (from your descriptions) that you are out of the ballpark at least for an FHA loan.
P.S. if your state offers free homebuying counseling classes it might be worth checking out. Some are better than others, but it might be worth it.
Thanks for the encouragement! All of the negs are from before 2000 except the Student Loans which are still in default but will be out due to rehab in Feb or March...One of the Judgements was filed IN 2000, but is paid off...does that matter?
The banker laughing in my face is exactly what I am afraid of...
Does anyone know the web address for HUD?
I just checked to make sure (I have my EQ report right here)...the date on one of the 3 collections is this year, but the last activity date was 8/96...it was assigned in 2/01, and the dates on the SL are 94 and 95 with the date assigned to the govt in 98.
I don't dispute your experience, I do however look at the market. Market trends may be local, but I have found in the area I live even mobile homes purchased within the past few years and in pristine shape bring far less than their original purchase price when sold.
You are correct that not all "fixer uppers" are a good value. A lot depends on the neighborhood, the condition of the home against its potential repair costs etc. One of my personal friends has become comfortably wealthy purchasing and rehabilitating "fixer uppers" and reselling them for far more than the purchase price - recouping his initial investment, repair costs, and profit each time.
In searching for a home a year or so ago, I found that almost all mortgage companies and banks balked at financing a mobile home over a traditional home. One of the biggest indicators I was given is the depreciation as well as the fact that most are located/set up in "parks" (I incidentally have land and offered to set it up permanently on site - I got no better reaction).