Florida teacher seeking a mortgage with poor credit?

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I’ve just completed teaching my first year in FL. I want to buy my first home but my credit is poor (I took some massive hits last fall/winter when we moved down here – long story).
There are many incentives for teachers to buy homes:
I’m especially attracted to the loans that offer a 4% grant or loan for the down payment / closing costs.
It sounds like if I go for one of the high rates it fixes for 5 years, I’ll have to refinance again and pay all of those closing costs again (ack!). But in the same sense, I’m confident that my house will go up in value (it’s in a prime area and we’re in a housing slump).
Will they still give me that 4% loan with my credit score in the high 500s?
I don’t want to go fishing for loans because my credit will take hits and I’ve been very careful. It has gone from the low-to-mid 500s to where it is now.
I’m married and my husband makes a tad more than me but with a lower score

I’ve seriously considered being a teacher for the past 5 years and I’m always finding excuses. If it helps your answer at all, I’m a 28 year old white male. I currently sell mortgages for Chase in Florida and have been in the loan business since college. I have a theatre management degree and was a stand up comic for 6 months out of college.

  1. Reply
    Dr. Deth
    February 2, 2011 at 6:27 pm

    Doubtful. I’m sure those rates are for people with credit scores above 700. You both need to fix your credit scores. stop spending, pay off credit cards – make all bill payments on time, save money – don’t soend foolishly. It will take time

  2. Reply
    February 2, 2011 at 7:03 pm

    You’re going to need to take a reasoned approach to this. With your credit scores you’re well down into ‘B’ or even ‘C’ paper territory. The resultant interest rates are going to leave you with a crushing debt to pay off.

    If you can rent for less $ $ $ per month it would make much more sense to rent for a couple more years and work on bringing those credit scores back up and save towards a down payment and closing costs. You really want to get those scores up at least another 100 points to be looking at anything close to reasonable rates.

    Run the numbers with the programs that you’re eligible for and compare that to your current housing cost as renters. If your monthly costs are comparable to what you’re paying now it might be worth going for it. But keep in mind that homeowners insurance in FL is EXTREMELY expensive so be SURE to get quotes on that and figure that into your monthly costs as well. If you don’t, you may be in for an nasty surprise at closing when you find out that your monthly cost is going to be double what you were expecting.

    FYI, multiple credit inquiries for the same type of loan product over a short period of time are scored as a single inquiry. Applying through several lenders will not affect your credit score any more than a single application would. That said, no lender needs to pull your credit to give you a good estimate of what you’ll qualify for if you know your score and already have a copy of your credit report. They will have to pull it to finalize the deal but if you’ve been honest with them there won’t be any difference other than the usual market fluctuations.

  3. Reply
    DJ B
    February 2, 2011 at 7:22 pm

    What you might consider is talking to a Realtor, to see what other options you may have. Sometimes there are sellers that are willing to do a contract for deed with say 10-20% down.

    If you want I’d be glad to have someone call you, just let me know. I’m licensed in Florida, but live in Minnesota at the moment.

    Let me know if I can help further, just email me.

  4. Reply
    February 2, 2011 at 7:54 pm

    There is a whole bunch of things you do not want to do–like look for a loan??? Can’t buy the house with out a loan.. You and hubby both have bad credit.. How much bending over back wards do lenders have to do to help you… Bad credit automatically means hiigh interest rate. The credit rating stinks already what difference does it make if lenders do a search. I get the feeling that you done some of this leg work already and were denied credit???
    You and the hubby work jobs and pay off the bad debts then reapply for a home loan. … You really do not want to buy a home now at the very peak of the market…. Buy a home on land contract from the owner… Cut expenses and no shopping spree. Your paying debt not making your ego feel better by shopping sprees…
    Work hard and cut expenses and pay off debt for 2-3 years. or feel sorry for your self and forget about being a home owner…
    The ball is in your court…???.

  5. Reply
    Albert M
    February 2, 2011 at 8:36 pm

    If you are able to get the property now at a lower price than you will in 2 years then I would “go for it.” I am a Mortgage Broker who lived in Florida most of my life. I think Florida is one of the hot markets for buyers right now. You will pay a higher interest rate, but you will be able to get the property for a much lower price now than in 2 years from now. If you can afford the payment I say go for it. Also stick with a fixed rate even if you get a sub-prime loan, sub-prime banks are pushing fixed rate loans and most times they are just as low as adjustable rates. Also look into 40 and 50 year programs, they will give you lower payments will still paying off some of the principal.

  6. Reply
    February 2, 2011 at 9:31 pm

    ALL so called lenders from Overseas are Scammers.
    LOAN SCAM – Do Not Pay UpFront Fees.

  7. Reply
    February 2, 2011 at 10:11 pm

    I doubt you will qualify for that loan, that “established credit worthiness” piece will shoot you down.

    You can ask, what will it hurt?

    Although I know you have been working hard to repair your credit, you may need some more time to distance you from the bad situations that caused your credit debacle.

  8. Reply
    February 2, 2011 at 10:16 pm

    The 4% grant/loans you’re speaking of usually require a credit score of 720 & above. There are lenders right now that are give 100% financing with a 580 credit score (as a full doc loan). There is an upside & downside of you buying a property right now. The upside is you will be buying a home with today’s prices. The downside is you will be paying a rate of about 8.50%.

    Weight out your options and discuss with your husband what will work best for you. If you need a Mortgage Broker then please feel free to contact me.

    Good Luck!

  9. Reply
    February 2, 2011 at 10:16 pm

    it depends public or private- generally public school kids dont really want to learn while private kids are trying to get into great colleges

  10. Reply
    February 2, 2011 at 10:59 pm

    I resent Dmac’s answer! I was a public school student, and i’m university qualified, a three-year-trained english/drama teacher, so dont make such stupid general assumptions.

    the best thing about teaching is getting up in front of the class and actually teaching. ask any teacher, and they’ll probably tell you thats their favourite thing. the worst? dealing with paperwork and when big issues blow up in the school.

  11. Reply
    ANGEL Baby
    February 2, 2011 at 11:17 pm

    Hi Casey:

    The best thing about teaching is getting a student to grasp a concept. Whether it be math, acting or volleyball…..

    The worst thing about teaching in public school is the lack of money that teachers are paid.

    Have you considered taking your mortgage experience and doing commercial loans???? I LOVE IT and still have time to be an aide in a forth grade class that my friend teaches!

  12. Reply
    February 2, 2011 at 11:58 pm

    I am a teacher so don’t listen to what that Dmac guy is telling you. Public school children do want to learn just as much as the private schooled children. No matter what situation a child is put in private or public the child will only learn if he/she wants to and is encouraged to. It is true teachers don’t get paid as much but the thought of a child being inspired because of you is just amazing! Imagine you teaching something that a child never got before and then once you explain they get it. They understand what you are talking about. It is an amazing feeling and I would not change it in the world! I am only 21 and i just started out and I love it! I hope you decide to become a teacher it is a rewarding job. If you like kids you will like your job no matter the income! Good luck!

  13. Reply
    February 3, 2011 at 12:40 am

    Kids are kids and you’re going to have to accept that with the enjoyment and challenges you’ll come along the way too. The pro’s about teaching high school is that they’re older and concepts are easier to them, its easier for them to learn new ideas and connect them. Its also easier to communicate with them. The con’s are they think they’re already an adult and know everything and sometimes will act like they’re the best thing on Earth, but again kids are kids and that has to be remembered. If you enjoy working with kids and enjoy that age group, then go for it. Its been nagging at you for that long. What’s the worst that’s going to happen? You don’t like it, you know you’ve tried it and you go back to your old life. Or you could love it and make it a permanent change in your life.

  14. Reply
    She Who Must Be Obeyed
    February 3, 2011 at 12:50 am

    Just being a teacher means that you’re tied to a bell schedule. No more lunches out or running errands at lunch, no coming in late, no leaving early. If you have to use the restroom, you have to wait until you can leave without being late to class. It takes some getting used to. You will also be tied into very specific vacation times. You can’t just take a week off during the school year. As a matter of fact, you can’t take a day off without preparing the work for the day so that the sub will have lesson plans. If you’re still interested, let me know and I’ll tell you what the actual job is like.

  15. Reply
    February 3, 2011 at 1:16 am

    The most important thing that you need to consider is whether or not you have a genuine desire for teaching children. Because teaching is a difficult job, you are going to need that passion to get you through all of the hard stuff.

    The hardest parts are behavior management and statewide testing. Behavior management takes intuition and a positive attitude. Students will eat teachers alive if they make stupid, demeaning remarks and who have no understanding of how to motivate people. However, I have a friend who has a hysterically funny sense of humor and she uses it to manage a class or severely emotionally disturbed students. They live for her jokes and don’t want to make her mad. So you may have the humor part covered!

    Statewide testing is a constant pressure on teachers, depending of course on the subject matter you teach. You will be judged on how well your students do, no matter how low they are and you will be asked to teach to the test, which is really against commonsense. Also, in high school you may be dealing with 150 students a day, which can bring on a certain sense that you have no relationships with kids because you see so many every day.

    Also, if you decide to teach, before you accept a job, find out all you can about the building’s principal. Having an idiot principal can make your life miserable.

    The good parts of teaching are your relationships with kids and the other teachers. I simply love kids and I get enormous gratification in helping them reach their goals. I also love to collaborate with other teachers and take part in planning school activities. High school is particularly fun because of all the sports and clubs. It is fun to coach or sponsor a club and it is extra money too.

    There are several other benefits to being a teacher that cannot be found in any other profession, June, July and August. The time off is so precious! And if you have kids, you get to spend all of their holidays with them and get paid for it too!

    Finally, the benefits are pretty good. I have had excellent heath care plans and retirement options during my entire teaching career!

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