My sister is single and makes about 35k per year. She applied for a 35k loan to buy and move a house to her property. The house (in good condition) was to be sold for 20k or be torn down for a building project. The remaining 15k was to be used for the house foundation & to move the house.
She had great credit until about 3 years ago when she had an accident and had some trouble paying 3 particular bills. She paid off 2 of the bills but still has 4 payments left on one of them. Other than that, she owns her car, her 37 acres of land will be paid off in 6 months, and she owns the trailer she's been living in temporarily on her land.
She applied for the 35k loan & was turned down, mainly, they said, because of that one outstanding debt which is only about $1200. Does this sound right? We were all shocked when she was turned down. I know of people who've declared bankruptcy and still got house loans. What's the deal? And any advice on what she can do? Thanks
2007-01-29 13:50:53 · 3 answers · asked by passin thru 2 in Business & Finance ➔ Renting & Real Estate
Tell her to shop around, or to try for an FHA loan, they are not so obsessed with the credit score on FHA loans. There are lots of programs out there to help people with poor credit to buy a home. I would say FHA is the best way to go but she should do some research because there could be a different program out there that is better for her.
Tell her not to shop around too much because every time someone pulls her credit it will negatively effect her credit score, and if you apply for a loan they are going to pull your credit every time.
My lender told me not to shop around too much because if other lenders see a bunch of credit reports pulled by other companies they may think you were continuoisly being turned down, and that looks bad, I suppose he could have been lying because he didnt want me to shop around much and then to go with a different company, but to be on the safe side dont go to a ton of places, Im not saying dont shop around Im saying dont go crazy.
2007-01-29 14:01:45 · answer #1 · answered by ♥♫♥ Crystal ♥♫♥ 4 · 2⤊ 1⤋
If you look on the TransUnion, Equifax, or Experian web site, you'll see that your credit is not hurt just because you've applied for mortgages from several different companies. The scoring engines recognize that you are only getting one mortgage, and allow you a rolling 14 day period to shop around. So your sister should shop around.
With that said, it is not the unpaid debt that is hurting your sister. Most underwriting guidelines now allow you to have upwards of $5k in unpaid debt when the loan closes. Rather, it was the pattern of unpaid debt that is hurting your sister. Only time can heal that.
The advice above about FHA might be the best way to go.
2007-01-29 22:53:40 · answer #2 · answered by CJKatl 4 · 3⤊ 0⤋
you might have a credit card bill worth 100 bucks...but if you make 4 late payments, you kill your credit.
shop around, there is something out there..........but it might not be great....probably a very high interest rate
2007-01-29 23:25:37 · answer #3 · answered by djdraven99 2 · 0⤊ 0⤋