My husband and I have a really good steady income but our credit is bad can we still get a mortgage loan?

Deal Score0

Awaiting my husbands VA Disablity our credit really went down and it is still bad. Having a hard time getting it back up. We got a loan officer who said pay this & this off and by March 2010 we’ll get you the $ 250,000 asking price which will allow you to keep your current home (that we owe $ 50,000 on).

Well the house has been vacant for 1yr 1/2 and we called the real estate guy and asked him if the bank would lease it to us until March and he said that wasn’t an option. This house is appraised at the tax assessors for $ 710,000 and it is a dream house.

How can I get financing for this house? Who offers creative financing??? Or is that a real term?
The price of the new house I want to purchase is $ 250,000

We want to keep our current home and rent it out…we owe $ 50,000 on it.

We never lost our house the two years my husband was out of work!
Va claim resolved income more than $ 5000 a month

We only have 4 credit cards with $ 500 or less limit & our current mortgage is $ 690

We just can’t get around the bad credit score

6 Comments
  1. Reply
    K W
    February 7, 2011 at 7:20 am

    it will be hard to get a loan but it can happen if the loan officer thinks you will be able to pay it off. it can be hard during these times and many people had their credit go down. by the way it is a good time to buy a house right now because the prices will soon increase

  2. Reply
    Bizsavings
    February 7, 2011 at 7:25 am

    You may want to contact the Va about home loans. You mentioned keeping your current home. Will the new home be a vacation property or your primary residence? What are your plans for the current home?
    Will you rent or sell it? If you’re going to sell it, how much can you put down on the new purchase? Are there any maintenance issues with the home, since it was vacant for over 1 1/2 years? These are some of the concerns that I would have and I wish you the best. See the following on buying a home with bad credit.

    http://www.ehow.com/how_5362730_buy-bad-credit-collections-judgments.html#

  3. Reply
    Doctor Deth
    February 7, 2011 at 7:29 am

    in order to get a $ 500,000 mortgage, you will need to have $ 175,000 in annual income. it doesn;t sound like you make anywhere near that, or your credit wouldn’t have gone bad

    and If you have that kind of income, you shouldn’t have any debts to pay off

    what you claim your mortgage guy said makes no sense – and if you are in danger of losing your house witha $ 50,000 mortgage on it, how can you poossibly be thinking about geting a $ 500,00 mortgage???

    you better dream a lot smaller. why do you need a bigger, more expensive house for in the first place? the idea is to pay off your house and not to have a mortgage as you get closer to retirement

    and that $ 700,000 “tax assessment” may not have anything to do with the “real estate appraised market value” for mortgage purposes

  4. Reply
    bdancer222
    February 7, 2011 at 7:40 am

    Creative financing is what caused the mortage meltdown. You are not going to find anyone offering it now.

    You need to pay off any derogatory items on your credit file and rebuilt your good payment history to fix your credit problem. You will also need cash for a downpayment (20%) plus closing costs.

    If you husband is going on disability, that doesn’t sound like your household income is going to increase.

  5. Reply
    Lauren F
    February 7, 2011 at 7:46 am

    VA Disability claims take a very long time to get resolved – in some cases a year or longer. I would wait until you know if you will be approved, and the amount of money involved, before committing to such a substantial mortgage.

    Alternately, you could sell your existing house and use the proceeds from that sale to finance this dream house, and then when your income stablizes, buy another rental property.

    Keep in mind, though, that banks don’t often give customers who are new to the landlord business much credit for the rental income their property will bring in. Banks assume you will only be able to rent it out about 10 months a year, so you will have to show sufficient funds to carry the other months when you don’t have tenants paying rent.

  6. Reply
    My Take on It
    February 7, 2011 at 8:05 am

    If your credit is that bad, there is no way around it other than to bring up the score. That will take time.

    The only *creative financing* out there now would be owner financing or a lease option, which you have already explored with the bank and they flat out said no.

    You will hit a brick wall until you can get your credit above 620 to get an FHA loan.

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