Question on Low Credit Score and Mortage

[pghquest]

Originally Posted by TimtheGuy

BK over a few thousand $ is ludicrous!

Especially over medical bills that are how many years old? It would be better to let them sit on the credit report, and let them fall off due to time, then filing bankruptcy, starting the 7-10 year time limit for "bad" credit all over again..

[poconoproud]

Originally Posted by darrell2525

Hello.

I just graduated from college about 7 months ago. I have wife and son; we are 1st time buyers. My credit score is 590 and I want to buy a home for about 175K in Texas.

1. How much will my interest be, roughly? Will it be 7%?

2. Can I afford the house even if I make about 68k a year?

3. Should I wait until my credit score improves to about 700 to start shopping for home?

I need these answers before I start searching for home. I do not want to pay more for mortage then I have to.

Thanks in advance.

First of all, congrats to you and your wife for not jumping into this without doing all you can to make sure it works for your young family. Second, You should try to work on that credit until your score hits about 690. 68k per year is a nice income - but if your debt is eating it all up to pay for that education that deemed it possible to make the 68k - you probably don't have alot left for savings. Try depositing about 50 dollars per week into an interest bearing savings account, or whatever amount you can. Then, when you reach 1,000 - take $500 and buy a cd. keep depositing that money weekly, and when the CD matures, deposit the profit and take out another CD. Good luck to you, I'm sure you will do well, because you are planning for it.

[FLPL75]

Originally Posted by pghquest

Especially over medical bills that are how many years old? It would be better to let them sit on the credit report, and let them fall off due to time, then filing bankruptcy, starting the 7-10 year time limit for "bad" credit all over again..

according to his list the oldest is 18 months old. if he decides to wait till they fall off which can be anywhere from 4 to 7 years(depending on the state he is in) he will have to wait that long to buy a house. because once his credit report shows a mortgage the creditors are going to take a closer look at trying to secure a judgment then attaching a lien on the property.

[darrell2525]

Originally Posted by poconoproud

First of all, congrats to you and your wife for not jumping into this without doing all you can to make sure it works for your young family. Second, You should try to work on that credit until your score hits about 690. 68k per year is a nice income - but if your debt is eating it all up to pay for that education that deemed it possible to make the 68k - you probably don't have alot left for savings. Try depositing about 50 dollars per week into an interest bearing savings account, or whatever amount you can. Then, when you reach 1,000 - take $500 and buy a cd. keep depositing that money weekly, and when the CD matures, deposit the profit and take out another CD. Good luck to you, I'm sure you will do well, because you are planning for it.

Thank you for the good post in regards to CD. I will research CD investing, do some calculations and planning, and decide if CD is a good option for me. I think it is intelliegent to research (spend about 5 mintues) every piece of advise I get from people.

I am saving alot before we move in the house. My main focus is not getting a high interest on my mortage loan. I am hoping for a credit score of 700 and a min interest of 7%. I can be patient for the next 9 months and thats all I can take with this apartment stuff (too small).

Thanks for the help. I am now trying to settle the unpaid medical cost on if the collection agency will DELETE from the 3 credit agencies. If they can not provide a letter to me stating to delete the debt once I pay, then I guess it will stay on there for 4-7 years.

[poconoproud]

Medical was our biggest problem. When we had kids, we had no insurance, and had three C sections within 4 years. It was tough to say the least. Happy Holidays!