Have lots of medical bills and other misc. debts that have all been sent to collections, but have never had a credit card or any kind of extended credit... Want to know how I can purchase a new home or somehow get a loan, so that I can start to build credit.
2006-06-28 22:50:42 · 5 answers · asked by mashugana67 1 in Business & Finance ➔ Credit
Before you do/apply for anything, get a copy of your credit report. Then look it over to make sure all those bills that were sent to collections are paid off.
Once you're sure their all paid, be prepared to pay at least 25% down on your home at an interest rate between 7 and 9%. That's the going rate for bad or no credit right now.
2006-06-28 23:08:38 · answer #1 · answered by this_isridiculous 3 · 0⤊ 0⤋
I've been in your shoes.. yup, youz gots a tough time ahead.
Of course you can buy a new home.
Why couldn't you?
You just have to have cash instead of getting a loan - OK I'M JUST KIDDING. Of course you don't have the cash - that was mean.. I know where you are at in life - I've been there.
ESTABLISHED CREDIT: You say you have never established credit.. actually, you have established credit. Unfortunately it's bad credit. Ok, now we got through the denial part.. let's move on ;)
You would definitely need to get all the collections paid off before you could financially afford and get a good interest rate on a loan, etc. BUT THERE ARE OPTIONS in life..
OPTION 1 - There are also home-owners that do lease to own options. You don't really take out any loan. You simply make the rent payments that will go towards the down payment, if you ever chose to purchase the home. If you don't purchase or things change in your life and you can't purchase.. you simply lose the money just as if you were renting and you move on.
OPTION 2 - DISCIPLINE AND INVEST: Live in a REALLY cheap apartment. Save up the difference between the apartment rent and what you would have been paying on a mortgage. There is actually a breaking point at which renting can be more financially beneficial to a person than buying a home. Go in Google and type rent vs. own - there are calculators (hard to find because people don't believe this is possible, but it is). There are tons of possibilities. You can rent from a friend who has a spare room. You can live with somebody who needs help cleaning and cooking. You get free rent and money sometimes.
Eventually you will be able to go for that loan when you get your finances and credit in line. You end up doing the same exact thing - except you will probably be living in a rinki-dink apartment instead of living in a home for those early years.
It may take 7 years .. before your credit is good or whatever, but it's farther ahead than if you never did it in the first place. And you'd have a heck of a down payment on a house. Let's say cheapest rent is $300/mo. Difference between rent and own, $900/mo. Save $900 a mo. for 7 years.. that'd be....$76,000
BUILDING CREDIT NOW: Get a $500 credit card with no yearly or monthly dues. Buy groceries with it. But pay it off every month.
DEBT CONSOLIDATION: Don't do the debt consolidation thing. It's a hit against your credit score. It says you can't do it on your own. But if you can't do it on your own... go ahead with the consolidation peoples.. but be careful. But at least you're farther along than if you stick to the same habits.
2006-06-29 01:09:31 · answer #2 · answered by game buddee 3 · 1⤊ 0⤋
From what i have heard, stumble on in straight forward words themes playing cards to those with impressive credit. AMEX is incredibly picky too. i'd propose attempting a visa or mastercard. I were given a Capital One Card many years in the past, even even as my credit wasn't the desirable. Capital One has also been top notch about raising credit limits on a normal foundation, presented the debts are in good status. also, another 3 hundred and sixty 5 days I call to ask them to waive the once a year cost (incredibly low on my card) and they continually do it. i'm no longer prepared on any mastercard company, yet won't be able to ***** too a lot about my memories with Cap. One.
2016-11-29 23:14:01 · answer #3 · answered by curlee 3 · 0⤊ 0⤋
More than likely for a house, you will have to save a larger down payment and pay higher interest than someone with better credit.
2006-06-28 22:54:34 · answer #4 · answered by Anonymous · 0⤊ 0⤋
any chance at all will be from here
http://www.wesayes.com
2006-06-29 00:44:57 · answer #5 · answered by umdanddvd 3 · 0⤊ 0⤋