Where can I get a residential mortgage loan?

Question

My credit score is right around 500. I make 32,000 year. I am trying to purchase the house I currently live in that my parents own.
The lender ordered an appraisal that came in at 52,000. I only need to borrow 35,000-40,000. I have steady employment and make 34,000 year. I currently have no other debts except credit card chargeoffs, that I am paying back....which is why my credit score is so low.
The mortgage co. I have been working with says they cannot find a "home for the loan" based on these three things:
1. low credit score
2. no verification of rental history( I've always paid my parents the rent in cash)
3. Loan amt. is under fifty thousand.
If you know of any lenders that would loan on this please let me know.

Answer 1

This is a doable loan- but it is a difficult loan. What you need is for your parents to give you a "gift of equity" in order to compensate for the lack of down payment- which I assume is the problem for your loan officer in finding it a home. It might be necessary to adjust the sales price to the appraised value to offset this. The fact you pay your parents rent is not an issue- underwriters will understand that part of it. I could do the loan for you- send me an email.

Answer 2

There are a couple of things you can do to make this transaction work.

#1 Find a mortgage broker in your telepone book that specialize in Sub-prime lending. Get him the following

#A One month of pay stubs

#B Six months of bank statements for all the banks you do business with to include any 401k plans you participate in at your place of employment

#C Two years of W-2 to include your fed income taxes that match the W-2

You already know your credit scores so we are not talking the best interest rate going for the best possible borrower.

Since your present broker or loan agent can't do the loan tell him you want the appraisal changed to a new mortgage broker, that is if you paid for the appraisal. If you did not you will be required to purchase a new one.

There are a few lenders that will want a higher loan amount but most will do just about any loan amount.

Most of the sub-prime lenders will not require Verification of rent and will already know about your lower credit score.

Now the other method is your parents can be the bak, draw up a contract between you and your parents as to how much the sales price will be, how much you will put down with the remainder being a loan that you have to pay them. It can be a 30 year loan all due and payable in 5 or 10 years or what ever they feel comfortable with, charge an interest rate. Put all this into a contract. Then call a title company (Look in your local telephone book)

Tell them you are buying your parents home, you have a contract and want to ujse them as the closing agent. It will cost a little money but is well worth it. You will get title to the property, your parents will get a note and deed of trust indicating they have a vested interest in the property.

The title company upon closing will give your parents a note that tells them the amount you owe, the monthly payments as well as the interest rate you guys have agreed on.

Now what ever you do pay your parents the monhtly mortgage in checks drawn on a bank that has your name on the bank account so you can get all the cancelled check. Annotate each check you pay the mortgage with as Mortgage payment.

After a year has passed you will be able to refinance the property, but it will be in your name at the county recorder, you will have cancelled checks proving that you make the monthly mortagage payments. All this for one year of proof.

Your credit scores would have improved so you will be in better shape to take advantgage of a better interest rate.

Select the one that you and your parents can live with.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 3

The three reasons listed are very valid, and it is a very difficult loan to do. Many brokers are not going to want to take the time to 'shop' it, becasue it is so difficult to place and they can't make enough return in income on the loan size.

Hard money lenders may not be interested either, as the loan size is small and once you add in their required fees, you are above most of their caps of either 65% or 70% total Loan-to-Value.

I would suggest going to your local (if you have one locally) CitiFinancial office. I have seen them do these types of loans before. They are going to be really interested in the equity position, and may even ask that your parents co-sign the mortgage with you. This may put you in the position of a refinance transaction.

Then, you will need to work hard over the next two years to get your credit in better shape so that you will be able to refinance them off the mortgage. In the mean time, you will be resolving a couple of the issues - creating a payment history that is traceable, increasing your scores (hopefully above a 620+), and actually getting into an even better equity position

Answer 4

Why don't you just let your parents carry paper? Basically they become your lender and will secure your debt by a deed on the property. They can either use the monthly payments as income or sell their note.

You can also do a lease purchase option. That way, when it comes time to buy, your credit is cleaned up and your loan will be treated as a refinance, rather than a purchase.

With your credit score, I would think outside the box.

Regards

Answer 5

Check with your local mortgage broker. Ask him if he does "sub-prime" loans. If your credit score is bad but you do not have any negative remarks on your credit for the last 12 months you may qualify for one of Wells Fargo's community outreach programs. There are a lot of options depending on your circumstances, but the first step is always to check with you mortgage broker.

Answer 6

your best bet would prolly be private money, they charge more (think 2 digit interest rate) but after a year or 2 with them, you could refi conventional.

how to find private money, its not easy :) your best bet is to open your phone book and call all the mortgage brokers in there they are your best bet in knowing where to find you some money