Buying@85% LTV but have bad credit...HELP

[BriansPerspective]

An 85% loan to value ratio means that you are putting 15% cash down. It does not mean that you are only paying 85% of what the house is worth. If you buy the house for $205K, then the market value of the house is $205K by definition.

It is unlikely that a lender will give you a 100% loan on the house if your credit score is 520, but definately talk to a reputable lender and find out.

Also, find a reputable REALTOR and ask them to run a market analysis on the home. The owner may be telling you that the home is worth $239K, but if the owner is willing to sacrifice and sell it for $205K, then the home is probably only worth $205K or less. There are always good housing buys out there. This is not the only one around.

My best recommendation to you is to quit spending money on anything that is not absolutely neccessary and start saving at least 10% of what you earn. If you have cable TV, get rid of it - that's an immediate $50-$75 per month savings. Stop going out to restaurants to eat. Make sandwhiches or eat at home.

For a long time, you have spent more than you have earned. In order to reverse that, you need to spend less than you earn and pay off your debt. Once you do that, you can then save the money that you were using to pay off your debt. After you save a chunk of money, you can invest it in a house.

Pretty soon you will have more money than you need, because you realize that you do not need to have everything immediately and because you will realize that most things are a waste of your hard-earned money. Good luck!

[aportinga]

Originally Posted by CharlotteAgent

Pulling your credit reg. is not going to help. Whats your score?

Pulling your own credit report will not effect your score. The score is based only on hard pulls from the File One database. Hard pulls are creditors. Lets say your looking to buy a car and stop in 2 different dealers over 2 different days. If each dealership pulls your credit report your score will decrease. This is the logic behind the FICO score which is used by all 4 agencies under different names but with the same logic.

The reason your score decreases in the instance above is because the database logic does not know if your looking to replace 1 car and comparing financial numbers between 2 dealers or actually replacing 2 cars (wife and yours) which ultimately will be more of a burden financially on your household with 2 payments. Thus the score decreases because the odds of you missing a payment now have increased.... And remember the Credit Report does not take in to account income with regard to the score. That is why in large acquisitions you're always asked for account information and a W-2. The Credit Report will only show how well you make the payments on the credit that has been extended to you.

Of course dealer # 2 will realize this because you would tell them that you already had your report pulled at another dealer the day before - they will have a bit of room to move in this case.

None the less pulling your own report does not consitute an extension of credit so your score will not be effected.

Back to the question(s)... What's your credit look like? How many trades (lines of credit) do you have open and how many are closed? Are you maxed out or are their legal trades such as a bankruptcy on your report?

520 is not good. Even @ 600 your going to end up paying for that discount (on the house) easily with the increase that the lending institution is gonna slap you with based on the score.

I would worry about you - not the house. Fix your credit and no doubt another sure thing will come - especially with houses. The only exception I can see to obtaining the home at a large % rate based on your credit would be if you are a solid handy man and have the time to make improvements and whatever it would take to buy @ $205K and sell at $250k.

Take the profit and pay off debt/car/loans and get your credit back on track. That way the next house that comes by you'll be in great shape, maybe have a car paid off and be able to grab a better % rate on a mortgage.

PM me if you like.