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Old 03-03-2010, 10:57 AM
 
136 posts, read 448,564 times
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I have horrible credit due to a foreclosure several years ago. I'm wondering if I put down a 30% down payment, would I be able to buy a house? If not, can someone explain from a business standpoint why a lender wouldn't do this, because I don't understand why credit even matters if I put down 30%. It's a secured loan, and they have 70% LTV which should be low risk regarldess of the borrower. I don't understand this huge emphasis on credit scores in our borrowing system, I think that is perhaps why the credit crisis happend. If it would have been based on down payments I doubt it would have ever happend.
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Old 03-03-2010, 11:01 AM
Status: "The Union forever! Down with the traitors." (set 18 days ago)
 
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It depends on how bad the credit is. You may be able to take advantage of FHA or another program depending on how long it has been since the foreclosure and what your credit history is like since then.

If your credit is complete crap, even with 30% down it might not be enough in the lenders eyes. You would fall into what lenders/brokers would refer to as a hard money loan and those are exceedingly hard to come by these days and from what I have heard on broker forums may require 50% or more of a down payment.
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Old 03-03-2010, 01:40 PM
 
Location: Pomona
1,955 posts, read 5,431,092 times
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Quote:
Originally Posted by mikejj2004 View Post
due to a foreclosure ...
This is the hurting part, not just the score or the downpayment. It's not going to be up to you to consider buying another house until it falls off your report, as in the lender's perspective, "this client is irresponsible".

Perhaps someone on the mortgage forum would have better input on this ...
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Old 03-03-2010, 01:44 PM
 
2,168 posts, read 2,638,816 times
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Quote:
Originally Posted by mikejj2004 View Post
I have horrible credit due to a foreclosure several years ago.

How many years is several? Doesn't it fall off the report after 7 years?
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Old 03-03-2010, 02:26 PM
 
Location: Boise, ID
5,565 posts, read 10,898,943 times
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Quote:
Originally Posted by Narfcake View Post
This is the hurting part, not just the score or the downpayment. It's not going to be up to you to consider buying another house until it falls off your report, as in the lender's perspective, "this client is irresponsible".

Perhaps someone on the mortgage forum would have better input on this ...
Not only that, but the lender is going to see it as "The reason this person has 30% to put down is because they didn't pay their last lender, why should we loan them money?

You could probably get a seller to finance you with 30% down, but you have to find a house that is owned free and clear to do that, usually, or that the 30% down can pay off the loan balance. Also, expect to have a higher interest rate.
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Old 03-06-2010, 01:50 PM
 
Location: Plano, TX
74 posts, read 154,107 times
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If the foreclosure is that old... it might not be hurting you as much as you think.
3yrs post foreclosure is the rule.... and I see people close 3yrs and 1 day after foreclosure.
You will likely need a 620 score.... And the down payment will help.

"My credit is not so good" is very 'relative' and hard to give you a specific answer.
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Old 03-08-2010, 02:28 PM
 
3,352 posts, read 7,492,981 times
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Quote:
Originally Posted by mikejj2004 View Post
I have horrible credit due to a foreclosure several years ago. I'm wondering if I put down a 30% down payment, would I be able to buy a house? If not, can someone explain from a business standpoint why a lender wouldn't do this, because I don't understand why credit even matters if I put down 30%. It's a secured loan, and they have 70% LTV which should be low risk regarldess of the borrower. I don't understand this huge emphasis on credit scores in our borrowing system, I think that is perhaps why the credit crisis happend. If it would have been based on down payments I doubt it would have ever happend.
Have you not worked on repairing your credit since the foreclosure?

You might be able to get a bank to do an in house loan (not fixed for 30 years and higher rate adjusting every 3-5 years).

Credit scores still matter even with substantial down payment because the borrower still has to make payments. You think the lender wants to or has time to be chasing down payments every month?

Would you want to lend your money to someone with a shaky repayment history? I am sure your thought is, well I would just take the collateral. Yea, after you wait a year and pay a bunch of legal fees...then once you finally recover the collateral is has been destroyed.
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Old 03-08-2010, 02:46 PM
 
12 posts, read 45,571 times
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The most complete answer is NO.

You must be beyond 7yrs and even then I'm told by bankers, that the "sweet spot" is actually 10 years. It stays on for 10years. You may be considered for a loan after 7, but you're only guaranteed "even ground" with a regular borrower after 10yrs. They don't want to see it at all anywhere, makes their job easier.
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Old 03-09-2010, 05:45 AM
 
5,262 posts, read 6,143,683 times
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You may not even be able to get a mortgage with an extra large down payment and good credit. I was putting down a quarter of a million dollars (over 50% of sale price) and have impeccable credit, and I was still turned down at the last minute by an idiot underwriter at Bank of America. Fortunately, I was able to put up the cash for the rest of the sale price so I didn't lose the house. But it just goes to show how irrational their decisions sometimes are.
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Old 07-05-2012, 07:23 PM
 
1 posts, read 15,357 times
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The Banks are not letting anybody have a mortgage, I tried to purchase a house with 50% down and was still turned down, by the bank, my FICO score was 610 at the time. Todays Housing market is horrible. I really feel sorry for the realtors who are trying to make a living. Maybe the banks will let the money loose soon. But today Forget about it !!!!
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