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Thread summary:

Family lost home in fire, seeking help qualifying for mortgage with low credit scores, FHA loan, have 45k to put down on 160k home

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Old 01-22-2009, 05:21 PM
 
2 posts, read 3,273 times
Reputation: 10

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Long story and I will try to make it as short as possible. My husband and our 4 small children lost our home to a fire in April 2008 the insurance company has been great and sent out a check to pay the remainder of our mortgage and the extra amount for rebuilding etc just a couple months later. We had to sign the check and send it on to our mortgage company as it was in their name as well. Stupidity follows as we should have kept abreast of the situation but alas hindsight is 20/20 and we stopped making our mortgage payments as rigorously seeing as how they had the full amount plus $50K sitting in escrow by December when calling around because they considered us 90 days late we realised that we needed to sign a certain form before the payoff process could be completed, I know this seems ridiculously stupid to all of you educated people but please keep in mind that our children had been traumatized (they are 18 mo. 3, 4, and 6 so pretty young) and we lost all of our belongings and our lives were completely upside down for many months so please forgive our ignorance. Anyway,
We had been approved for a conventional loan in November however my husband did not want to sign until we found a home because his work friends told him interest rates would only go down from then on, In December the agent said we would have to go FHA because of our credit scores and yesterday she emailed saying that because of my husbands fico score is 562 we could not qualify for either, My fico is 625 but I have no income as I stay at home with our small children. Are these 2 kinds of loans the only options? Accpording to the agent they are. We are planning to put at least $45K down on home price of no more than $160K. I know the whole mortgage payoff business got our credit in trouble but it is paid in full now and with such a large down payment I cannot help but think there MUST be some other option! Please help!! Our insurance company has paid our lease at our rental home thru April and this home is not an option come May we must move and I really dont want to rent for another year while waiting for our fico to rise, I would really love to get our family settled into our forever home, but we are being told we are all out of options. If you have made it this far in my post thank you so much for taking the time to read it and I appreciate your honest advice.
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Old 01-22-2009, 05:49 PM
 
88 posts, read 264,866 times
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How many lenders have you tried? I would think with $45k as a down payment, there would be some program that you qualify for. What about NACA.com? Good luck!
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Old 01-22-2009, 05:49 PM
SKB
 
Location: WPB
901 posts, read 3,104,056 times
Reputation: 320
Quote:
Originally Posted by Lifefullofblessings View Post
Long story and I will try to make it as short as possible. My husband and our 4 small children lost our home to a fire in April 2008 the insurance company has been great and sent out a check to pay the remainder of our mortgage and the extra amount for rebuilding etc just a couple months later. We had to sign the check and send it on to our mortgage company as it was in their name as well. Stupidity follows as we should have kept abreast of the situation but alas hindsight is 20/20 and we stopped making our mortgage payments as rigorously seeing as how they had the full amount plus $50K sitting in escrow by December when calling around because they considered us 90 days late we realised that we needed to sign a certain form before the payoff process could be completed, I know this seems ridiculously stupid to all of you educated people but please keep in mind that our children had been traumatized (they are 18 mo. 3, 4, and 6 so pretty young) and we lost all of our belongings and our lives were completely upside down for many months so please forgive our ignorance. Anyway,
We had been approved for a conventional loan in November however my husband did not want to sign until we found a home because his work friends told him interest rates would only go down from then on, In December the agent said we would have to go FHA because of our credit scores and yesterday she emailed saying that because of my husbands fico score is 562 we could not qualify for either, My fico is 625 but I have no income as I stay at home with our small children. Are these 2 kinds of loans the only options? Accpording to the agent they are. We are planning to put at least $45K down on home price of no more than $160K. I know the whole mortgage payoff business got our credit in trouble but it is paid in full now and with such a large down payment I cannot help but think there MUST be some other option! Please help!! Our insurance company has paid our lease at our rental home thru April and this home is not an option come May we must move and I really dont want to rent for another year while waiting for our fico to rise, I would really love to get our family settled into our forever home, but we are being told we are all out of options. If you have made it this far in my post thank you so much for taking the time to read it and I appreciate your honest advice.
Sorry to read of your troubles, especially for your kids.

Invest your money into a CD and rent, the rates continue to go down and if this goes through: A Plan to Fix the Housing Market | Fix Housing First you would make out really well.

Continue to pay your bills on time every month and build up that credit score again.
The worst thing you could do is sign a 30 mortgage will a crappy interest rate.
Build up to a score over 700 and get the good deals, don't be a sub-prime fool.

Best of luck,

P.S. Renting is vogue right now.
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Old 01-22-2009, 06:59 PM
 
28,384 posts, read 67,971,595 times
Reputation: 18190
There must be something else WRONG with your husband's credit to have sub 600 FICO. While I agree that renting is not a bad thing to do right now, you need to get your credit reports (FOR FREE) and go over all the details so that you can figure out why the score is so low.

https://www.annualcreditreport.com/cra/helpfaq
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Old 01-22-2009, 07:29 PM
 
2 posts, read 3,273 times
Reputation: 10
Default Also I forgot to mention

Quote:
Originally Posted by Lifefullofblessings View Post
Long story and I will try to make it as short as possible. My husband and our 4 small children lost our home to a fire in April 2008 the insurance company has been great and sent out a check to pay the remainder of our mortgage and the extra amount for rebuilding etc just a couple months later. We had to sign the check and send it on to our mortgage company as it was in their name as well. Stupidity follows as we should have kept abreast of the situation but alas hindsight is 20/20 and we stopped making our mortgage payments as rigorously seeing as how they had the full amount plus $50K sitting in escrow by December when calling around because they considered us 90 days late we realised that we needed to sign a certain form before the payoff process could be completed, I know this seems ridiculously stupid to all of you educated people but please keep in mind that our children had been traumatized (they are 18 mo. 3, 4, and 6 so pretty young) and we lost all of our belongings and our lives were completely upside down for many months so please forgive our ignorance. Anyway,
We had been approved for a conventional loan in November however my husband did not want to sign until we found a home because his work friends told him interest rates would only go down from then on, In December the agent said we would have to go FHA because of our credit scores and yesterday she emailed saying that because of my husbands fico score is 562 we could not qualify for either, My fico is 625 but I have no income as I stay at home with our small children. Are these 2 kinds of loans the only options? Accpording to the agent they are. We are planning to put at least $45K down on home price of no more than $160K. I know the whole mortgage payoff business got our credit in trouble but it is paid in full now and with such a large down payment I cannot help but think there MUST be some other option! Please help!! Our insurance company has paid our lease at our rental home thru April and this home is not an option come May we must move and I really dont want to rent for another year while waiting for our fico to rise, I would really love to get our family settled into our forever home, but we are being told we are all out of options. If you have made it this far in my post thank you so much for taking the time to read it and I appreciate your honest advice.
I forgot to mention that we have had some big trouble with getting our old health insurance company to pay for anything, Exactly one year after my now 4 year old daughter had surgery at 6 weeks I accidentally put down the wrong insurance company as primary, My secondary ended up getting billed and paid then renigged payment a year later by that time the actual primary said they would not pay, 4 years later they have paid one of the bills but there are still 2 that tally up to $26K that they have not paid, I have fought with them again and again but so far they are still outstanding. Within the last 12 months we have paid off the only 2 credit cards we had and my husbands student loans, We own our cars with no loan so a mortgage would be our only debt aside from utilities, groceries, etc. The loan agent at this company says none of those things matter if the fico isnt above 580 for my husband then we are automaticallly declined????
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Old 01-22-2009, 07:52 PM
 
28,384 posts, read 67,971,595 times
Reputation: 18190
You situation with the medical bills is probably a lot of the problem -- if there are collection agencies involved that really can sink your score. I suspect that a situation like you describe COULD be helped by getting some the right information to the right insurance company, but of course this takes time and records and that were lost in the fire...

You will not automatically get rejected due to low FICO, but right now there are a lot less lenders that will work with bad FICO borrowers, and those that do often want rather stiff rate penalties. Not good!

Makes much more sense to get your credit in order, if that means renting for a while you could be MILES ahead in a short time...

Last edited by chet everett; 01-22-2009 at 08:02 PM..
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Old 01-22-2009, 09:09 PM
 
Location: In the Pearl of the Purchase, Ky
6,968 posts, read 12,385,235 times
Reputation: 29157
We bought ours on contract. 7% interest, but we didn't have to go through a bank and no credit check.
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Old 01-23-2009, 05:50 AM
 
242 posts, read 650,122 times
Reputation: 192
Quote:
Originally Posted by Lifefullofblessings View Post
Long story and I will try to make it as short as possible. My husband and our 4 small children lost our home to a fire in April 2008 the insurance company has been great and sent out a check to pay the remainder of our mortgage and the extra amount for rebuilding etc just a couple months later. We had to sign the check and send it on to our mortgage company as it was in their name as well. Stupidity follows as we should have kept abreast of the situation but alas hindsight is 20/20 and we stopped making our mortgage payments as rigorously seeing as how they had the full amount plus $50K sitting in escrow by December when calling around because they considered us 90 days late we realised that we needed to sign a certain form before the payoff process could be completed, I know this seems ridiculously stupid to all of you educated people but please keep in mind that our children had been traumatized (they are 18 mo. 3, 4, and 6 so pretty young) and we lost all of our belongings and our lives were completely upside down for many months so please forgive our ignorance. Anyway,
We had been approved for a conventional loan in November however my husband did not want to sign until we found a home because his work friends told him interest rates would only go down from then on, In December the agent said we would have to go FHA because of our credit scores and yesterday she emailed saying that because of my husbands fico score is 562 we could not qualify for either, My fico is 625 but I have no income as I stay at home with our small children. Are these 2 kinds of loans the only options? Accpording to the agent they are. We are planning to put at least $45K down on home price of no more than $160K. I know the whole mortgage payoff business got our credit in trouble but it is paid in full now and with such a large down payment I cannot help but think there MUST be some other option! Please help!! Our insurance company has paid our lease at our rental home thru April and this home is not an option come May we must move and I really dont want to rent for another year while waiting for our fico to rise, I would really love to get our family settled into our forever home, but we are being told we are all out of options. If you have made it this far in my post thank you so much for taking the time to read it and I appreciate your honest advice.
spend a few hundred or a thousand on a very good lawyer and clear all this up. Wait to buy and get a real good deal.

Use paragrapshs, I could not read the whole thing, got lost..lol
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Old 01-23-2009, 05:55 AM
 
Location: NW Montana
6,258 posts, read 12,592,590 times
Reputation: 3422
Quote:
Originally Posted by SKB View Post
Sorry to read of your troubles, especially for your kids.

Invest your money into a CD and rent, the rates continue to go down and if this goes through: A Plan to Fix the Housing Market | Fix Housing First you would make out really well.

Continue to pay your bills on time every month and build up that credit score again.
The worst thing you could do is sign a 30 mortgage will a crappy interest rate.
Build up to a score over 700 and get the good deals, don't be a sub-prime fool.

Best of luck,

P.S. Renting is vogue right now.
Ditto! Way to go! So absolutely correct! Good Post!
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Old 01-23-2009, 06:03 AM
 
Location: lumberton, texas
652 posts, read 2,412,298 times
Reputation: 253
I agree with needing your credit reports asap. make sure that your home loan says its paid in full. When I sold my old home (I had 2 mortgages), they had on the credit report that one was paid off and the other was deliquent. that brought my score down. I had it taken care of in a couple of months.
I do suspect the medical has more to do with this. I too think you need to rent and get your scores up and wait for a good deal. try to get a 6 month lease somewhere. good chance you could have all of this cleared up in that time.

no offense, but you seem like the type of person that doesnt pay attention to the fine details. I totally understood the fire incident but the medical on top of that. If you dont understand the paperwork please find family or friends that can help you. dont be signing into some crazy mortgage!
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