U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 06-05-2009, 10:31 AM
 
7 posts, read 39,755 times
Reputation: 10

Advertisements

I hope I can make all of this make sense.

I am being transfered to Utah with a start date of August 3rd. Recent divorce. During the ugly end my credit rating was destroyed. Down to a 530. I am in process of re building and the last time I pulled it it was 618. This was with the one last credit card I have left nearly maxed out. This was mid April. Since then, I have been paying huge payments per pay check toward that card and it will be at about 30% of the limit by the end of June. Of course, doing that is making it so my cash reserves are minimal and what I do have will be spent for the moving van, hotels, etc going across country.

I really do not want to rent again, and then move again when I can comfortably buy which would be in about 6 month to a year. I am raising a 13 year old by myself and want to get where we are going to be for his high school (I know emotion not logic)

Using all the calculators and percentages I see floating around the internet my ratios qualify for an approx. 189,000 mortgage +- 2000. Other than the aformentioned card I have a car note and student loans.

I have found a home I like for 154,900. I am familiar with the sellers situation. Even with the dive they are in a good position and are offering cash back for basement finish project at close etc. The price is very reasonable for the neighborhood.

My thought has been a full price offer (I know they turned down one at 146,000) with them paying all allowable closing costs in the thought that I could obtain 80/20 financing with my ratio position. Problem is, I don't know if anybody is even doing those anymore.

Am I completely spinning my thought wheels here?

Any input or ideas would be welcome
Rate this post positively Reply With Quote Quick reply to this message

 
Old 06-05-2009, 10:54 AM
 
Location: Sacramento
2,568 posts, read 6,197,360 times
Reputation: 1924
Does 80/20 mean 0% down? If it does then you are out of luck.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 06-05-2009, 11:25 AM
 
Location: Summerville, SC
1,149 posts, read 3,926,217 times
Reputation: 1122
I don't think anyone is doing 80/20 these days. What about FHA? I mean, the down payment is so low that if you couldn't afford it, you are truly in a bad position to be buying in the first place.

Try to look past your emotions here. If my husband and I listened purely to emotions, we would have put ourselves in the poorhouse with NO liquid assets back in 2006 by buying into an inflated market. Three years later, we are so happy we didn't let emotions sway us, and we are buying a gorgeous house for less money than the tiny co-op would have cost us, in a much better area.

I know you have your child to worry about, but how long could it take to save up 3.5%? And, there is no way in this market (in my area) that I would offer full price on a home...
Rate this post positively Reply With Quote Quick reply to this message
 
Old 06-05-2009, 12:01 PM
 
7 posts, read 39,755 times
Reputation: 10
Quote:
Originally Posted by StarryEyedSurprise View Post

I know you have your child to worry about, but how long could it take to save up 3.5%? And, there is no way in this market (in my area) that I would offer full price on a home...
I'm fighting two battles. Rebuilding my credit score and saving. I was fine with the slow path while sitting here where I am but once this transfer came up it put me in a position of having to move into an another apartment or another rental house and then turning around and moving again in 6 months when I do buy. This kid has been through three moves and his mother walking out in just over two and a half years. Really trying to provide some kind of permenant stability for him.

I can save the 3.5% in about 3-4 months but have been putting cash to paying down bills. My ex controlled the money and was not paying bills and was hording cash in the end and I was blind.

As for full price, these folks are already well below every other home in the neighborhood and even with an 80/bad position 20 I will be paying less than I pay in rent now.

I'm financially in a good place again finally, I just haven't had time to fix it on paper. Oh well.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 06-05-2009, 01:16 PM
 
Location: Sacramento
2,568 posts, read 6,197,360 times
Reputation: 1924
I think as long as your kid doesn't have to change school changing houses is not such a big deal.
You can try for a rent to buy contract with the owners. The way the market is they may take the offer.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 06-05-2009, 01:19 PM
 
28,461 posts, read 75,364,913 times
Reputation: 18525
Forgot 80/20. Frankly with your poor credit scores you should focus on FHA or other 'program' loans if you have any shot at VA or anything similar.

If you can scrape together the cash for the FHA loan you are still going to face a rough road of POOR credit score, recent job transfer / move, and the other stability stuff.

I would recommend trying to get the loan approvals lined up before I got too serious about any offers / negotiation, but it also occurs to me that if the sellers are in good situation they MAY be able to work something out so that they would either finance your purchase themselves or perhaps intervene with their current lender to work out some sort of assumable type situation. No guarantees, but might be worth a serious effort.

If the seller already has a VA or FHA loans those tend to be straightforward to assume, though depending on how long iit has been seen issue, the rate may be unattractive.

Even in cases where the loan has a "due on sale" clause the lender MAY be willing to allow you to assume it, especially if the seller is willing / required to have exposure...

You will need to do your homework and get a good understanding of what is possible, also realize that few real estate agents will be keen to present this kind of deal as it is FAR more involved that a 'normal' closing and it would be wise for your and the seller to have separate attorneys to make all the i's are dotted / t's crossed...
Rate this post positively Reply With Quote Quick reply to this message
 
Old 06-05-2009, 01:29 PM
 
Location: Texas
5,873 posts, read 7,253,107 times
Reputation: 2967
I think FHA is going to be your only route. And even most FHA programs are only doing minimum 620 scores (middle).

I would stop putting the MAX amount toward your card, and start funneling some towards the 3.5% plus closing costs you'll need for FHA.

Just a thought.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 06-05-2009, 01:38 PM
 
2,727 posts, read 4,630,286 times
Reputation: 2342
First, I am not sure that you will get 100% financing and seller paying the closing. But my point is not that. Even if you can, don't do it. If you are into the calculation just see how much money you could save by building your credit and getting a better deal on iterest rate. House price are not going anywhere. Utah actually is late to the party so you may still have a good chance in six to 12 month after saving for your down payment. Do the math.

I know from my experience that moving is so hard, ugly too. I have been moving all my life. In my last move the moving company actually damaged our luggage but that should not be an excuse to get into a bigger debt that you may have difficuly fulfiling. I really don't see a WIN WIN situation the way you described. For the school try to rent a house in good school zone than using creative financing even if you can get it. You will be glad you did it. when we came to florida there was no way for us to afford a house without creative financing that I refused even though I could easily get it. Now we are in the driver sit just after few years. Please rethink your plans. Research this site, you will get excellent info and will quuickly see why what you are trying to do is not a smart move.

And good luck to you in which ever direction you take!
Rate this post positively Reply With Quote Quick reply to this message
 
Old 06-05-2009, 03:24 PM
 
Location: Charlotte, NC
2,193 posts, read 4,666,213 times
Reputation: 1075
Why not just rent in an area that has an excellent school district. Not sure what Utah is like but here in Charlotte, you can get great apartments for great prices w/ excellent schoools.
I'm not sure why people are always in a rush to purchase a home. Why not just stay in the apartment for a few years throughout his HS years. By the end you should be debt free and have a large savings built up. And with the savings you can either fund your child's college education or put a large downpayment on a home. Or maybe do both.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 06-06-2009, 09:08 AM
 
7 posts, read 39,755 times
Reputation: 10
Been off for a while with down internet line but try to catch up some. I probably haven't made some of my points. Since the divorce, I have caught everything up, and just received a 1000/month raise. That is how I am paying everything down. The credit score thing really ircked me so I am pushing that hard. Experians "what if" calculator that I am paying them for says if I pay off this last card or at least get it down to below 30 % or so it "could" change my credit score to 680-703. That is why the push for that. That will be doen in 2-4 more weeks. I will also receive another similar size raise in April 2010. My current ratio of payments to NET income is only 10%. I am in great shape financially. It's just that all this just came about in the last 60 days. I will not be taking on debt I cannot afford, I will be taking on debt for approximately 2/3 to 3/4 the amount the ratios say I am allowed.

I am not changing jobs, I am being transfered with my current employer. I have been in the same field for 25 years.

Why not live in an apartment? To put it bluntly, it sucks !!! I'm old and set in my ways. Before the marriage devistation I had my little house I loved with my shop etc. Yes, I'm impatient to get back to that lifestyle. I guess I was just hoping there was still a lender in the world that actually did underwriting but I guess everything is a score and a formula these days.

As for renting and then buying in the same neighborhood, that is what I will try to do but no guarantee of finding the right house at right price at right time etc. OH well, we take what life gives us.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top