Hello, I am a new member and I am very glad that I found this site. I hope that someone will be able to help me. We moved into a home in this year, and it is a 'Lease/Purchase'. The contract that we signed states that ALL the money will be applied to the purchase price of the home when we close in April 30, 2002. I understand that with cancelled checks that we can use the money we will have paid the landlord for a downpayment, which will be $8,500.00 We are trying to save an additional $2,000-2,500 to put with it to make roughly a 20% down payment. We love the house and are really excited. It's a fixer upper, and I an very handy, and look forward to making it our 'dream home' We are both a little worried that our credit may prohibit us from being able to buy in a year. We have no bankruptcy or anyhting like that, however I have 2 small collections, ($390 and $120) that are not paid yet. They are right now 3 years old and buy that time will be 3 years old. I am going to be paying them, because they are mine, within the next month or so. Other than the 2 collections, I have noting on my credit report, except something from Gulfstate Credit that I disputed, (I've never had an account w/citibank) and it was deleted. Other then that, which is now gone, I have no late no payments, ever, and I have 7 open accounts, only one with a babalance (3200) and 7 closed accounts, all never late. My Credit expert scrore on experian is 680. My wife has only had 2 accounts open and it is a car payment, (2 years 3 months old, and a visa card with only a 250 limit (no balance) that has been opened for 2 years. She, (We) were 30 days late on the car payment in 10/2000, 9/2000, and 4/2000. Other than that, her creidt is clean. Her credit expert score is 610. By the time we are ready to obtain finnacing, we will have a completely clean slate payment wise for 19 months. No lates, collections, anything. We have once car payment, ($288) and 1 credit card payment ($70). I have a sutdnet loan payment of $115 a month and that is all the debt we have. Together we make $42,000 a year and by the time we finance will have almost 2 years each on the same job. Does anyone know if we have half a chance of getting financed? Thanks, sorry so long.
Hello, Welcome to the board! I will let the mortgage and real extate folks answer you question. Just wait a while, they'll get here.
If you can't get conventional financing, you should have no problem getting FHA financing. Most lenders require 1 year of good history. Good Luck.
Do not pay off the two collections until you do some more reading here. You must negotiate, in writing, a deletion of all negatives from your credit report before you pay. Otherwise, you will end up with paid collections which are almost as bad as a collection. Do not accept a verbal promise - they will lie. Do not accept their speil that they cannot delete the negatives. They will claim it is against the law. That is a lie. Usually they will delete if you ask and if you get it in writing. Once you pay, they will do nothing for you. So it has to be done before you pay. Also, these things never seem to go fast. Get started now, not next spring. You will probably have a few setbacks so you need to get going. But, read everything here for a week or so before you do anything. You don't want to screw up. Here is a tip. How do you know when a collection agent is lying? His lips are moving.
Well that is very good advice about the collections thing, however, I don't think that it will be necessary to have them take it all the way off, do you? I have been told, and I have read here that a couple of small collections are okay if they are paid. Besides, they are mine, and if they are paid by, say, next month satisfactorily I can probably dispute them after the first of the year and they will disappear anyway, since they are paid, they don't have much need to verify, right?
oh, one more thing, MikeB, even though I kmay qqualify for an FHA, I don't think the house would, it needs to many small things before a FHA lender would appprove, I do believe. I think I will have to rely solely on a convential loan.....I'm keeping my fingers crossed!
Just becuase the collection may be paid, does not mean the collection agency won't verify it. I have a medical collection from 1995 that the insurance company screwed around with. By the time they paid it, it was already reporting on my credit reports. I disputed it 3-4 times and they refuse to delete it. When I asked why they wouldn't remove it, the manager at the collection agency said it was illegal, which is a crock. But as of today it is still reporting.
What you need to do is go to a bank or mortgage company with your contract and see about being pre-approved for the amount you're trying to borrow. That will let you know ihow much you can borrow at what rate. I wouldn't worry about small items like what you described. Most people have nickel and dime stuff on their reports. It's when ypu have a slew of em that lenders worry. For now, I'd just go see if you qualify period.
I think you must negotiate for a deletion before paying these debts. Even after it is paid, they will validate the debt. Do not assume that they will fail to validate just because it is paid. They enjoy screwing up the credit of people. I have a paid collection for only $50 from almost three years ago that was not mine in the first place and I never paid it off. It popped up for the first time on my credit reports in March of this year, two years after they claim I paid it off. I am still trying to get it off. They are evil. They lie. A paid collection is better than an unpaid one. But, the interest rate you get depends on your FICO and you will usually need any points you can get. This is worth a few points so I recommend going for it. And, the time to do it is now. Don't wait.
