i don't understand this.a lender that i spoke to about a house loan told me?

Question

not to worry about paying my depts just get a credit card .which i cant because.i get turned down my credit score is 579.wouldnt it be better to just pay my depts?and if i do that will it take long for my credit to go up.and on my credit report it say somethings i owe are closed is that bad.

Answer 1

I am a mortgage banker in Tennessee, and Kentucky. First of all You are a sub-prime borrower at this point in time. Your Score must increase to at least 620 to obtain conforming interest rates. At a Score of 580 -you can get 100% financing but yes the rate is not pretty. If you are not ready to buy today then pay off all collection accounts today. Save at least 3 % of the home value as a down payment. Save enough for the closing cost and at least 2 months of the expected payment with taxes and insurance. Then you will qualify for FHA and their rates are still very good. If you are ready to buy now then OPT out of CC offers888-567-8688. This alone will raise your score over the 580 mark, and could go up as much as 10 points. FHA has no score requirements by the way just clean credit if any.
Good luck

Answer 2

For one concern, there is no regulation against it. And confident, we'd nevertheless be interior a similar fix as maximum that are or are turning out to be the loans that are going into default are the ARM or Adjustable value Mortgages, that are for the lender, no longer the shopper. With this form of non-public loan, the lender can come again the value will boost in activity and how it has long gone it has positioned the purchasers greater interior the hollow because of the fact the value of the valuables went down and the activity went up. Greed is the main significant clarification for the whole disaster besides as shopper lack of understanding of what they have been entering into. The lenders have been so grasping as to wish as many loans out as they might get to make greater funds with the ARM's and the customer did no longer do the examine mandatory to make a solid determination which might weren't in any respect to settle for an ARM interior the 1st place and to no longer get into some thing they actually might desire to no longer arise with the money for to do as lots of did. lack of understanding and greed are 2 issues that pass hand in hand to smash many that if there became none, there could be no disaster now.

Answer 3

Not necessarily. One of the big reasons people are denied for home loans is due to lack of positive credit history. You can get approved for subprime or Alt-A financing, but you probably need at least one open line of credit. It's AMAZING how much this will bring up your credit score.

Since you can't get approved for a convential credit card, what you need to do is go to your bank and take out a secured card for AT LEAST $300. Don't use the card on a regular basis, maybe once a month for gas, then pay it off when the statement arrives.

I've had clients credit scores shoot up 100+ points by doing this!

Answer 4

Pay your debts and make sure all of your bills are paid on time. Even a little early. That is a pretty good way to start rebuilding your credit. The lender you spoke to is worried about a short term boost in your credit rating so he can give you a house loan. That may sound like a good thing but it isn't. The advice of not worrying about debts will come back to haunt you and he may be trying to get you into a loan you cannot handle and on top of that you will have an extra bill in the form of the credit card payment.

There are a lot of dodgy lenders out there who will gladly get a customer too deep into the credit hole, especially for a house. They know that home owners will jump thru all sorts of hoops and let all sorts of other bills slide to make sure that house payment is taken care of. They also know there is capital backing up the loan. I would check with other lenders and see what you can find.

Also, is this a lender at a bank or one of those online places? Go to a bank and talk with their loan officer and get their advice.

Answer 5

Ok, I'll start from the beginning. YOur credit score is based off of the last 2 years of activity. If you have debts older than that on your bureau and you contact them to pay, it will bring them back to the top of your activity list, adding more delinquency to your recent activity, therefore lowering your credit score. This is why most mortgage lenders recommend not attempting to pay things off until after you get financed. When a collections company has closed an account it simply means they 'charged it off,' and gave up on collections. As long as they don't sell it to another company, if there is no activity, thos ewill fall off after 7 years. But that is a long time.. I would rather just pay my debts. Save $500 up and get a secured installment debt loan against the money, it pays its self off.

Answer 6

the only benefit of getting a credit card is if you can get an introductory 0% interest and then pay you debt with that and make sure you pay it off before it starts charging you the normal rate. you have to be disciplined to do this but if you can go for it. find a bank from bankrate.com that perhaps offers up to 5% interest find a credit card with the 0% interest and pay you debts and try to save quickly to then pay off the credit card.

Answer 7

Your lender is probably trying to stick you with a high interest mortgage.

Even if you pay your debts, it will take a month or two, at least, before it appears on your credit report, AND they will stay on for 7 years after you make the payments.

If, however, the past debts are close to being on your credit report for seven years now, they will fall off automatically.

Answer 8

This lender is giving bad advice. You need to pay your debts.

If you need a plan to get out of debt read: The Total Money Makeover by Dave Ramsey. Or listen to his web cast or his radio show or if you are in the Nashville area, watch him on TV.