Trying to get a mortgage.... Any help please!!?

Question

I am currently trying to get a mortgage with my girlfriend. We went to a mortgage company first and he ran our credit and everything and advised us to pay off some stuff that was "derogatory" and we did. Then the best he could do was like 20% down and an interest rate of like 11%. So I called a company that specializes in FHA loans and he said that everything looked good except I had a 16k dollar judgment against me from a hospital. He went on to tell me that FHA won't do a loan with a judgement that high. I was in the hospital for 4 days and at the time I didn't have insurance. This was 4 years ago. My girlfriend and I are both single parents. She has 2 kids(8,10) and I have 1(11) We both are raising them on our own and have been since they were babies. We desperately need help!! We are currently renting the house that we're trying to buy. The owners don't want to rent anymore, as they are trying to purchase another house. Anyone have any suggestions!!? Please!!

Answer 1

Even though you paid the derogatory items, they will remain on your credit report for seven years, just with a note saying satisfied. Only help is time
1. pay your bills ontime
2. pay your credit cards down to 30% of the limits
3. Stop applying for credit each time you do your score goes down 5-7 points
4. If you pay off a card that is still open do not close it that will damage your credit to debt ratio

Answer 2

That's tough.

It's pretty twisted, unfortunately. Had you had insurance, the bill probably would've been under $5000. Finally some states are trying to mandate that the hospitals can't abuse non-insured people so badly anymore, but they're not there yet.

Once debts go to judgment, they can potentially cause risks to a lender's lien status (the banks ability to use your home as collateral). If it were only a collection, maybe you'd have a shot.

The only real advice I can give you is to attempt to negotiate the balance down. Like to $5000 or less, but only if they allow you to go on a payment plan for a few years. They might do this, might not.

Usually, you'd have to be in a payment plan for at least 1 year (and prove that you've paid on time the whole time), but for medical stuff, they're usually pretty lenient, and could possibly consider financing you sooner.

http://www.ncsha.org/section.cfm/4/39/187 Click the link and find your state's housing finance agency. Maybe there's some way you can get downpayment or closing cost assistance that could be used to pay off a negotiated balance on this judgment? Maybe one of their participating lenders (mostly major banks and lenders) will treat it differently, or have a different idea? FHA is FHA everywhere, but much of FHA underwriting is done traditionally, with a human underwriter, and there is some personal discretion that could vary from one to the next.

Good luck.

Answer 3

With that judgement you won't qualify for an FHA loan. No way. A comm'l / savings bank won't touch you either. You're going to have to accept a high interest rate - make sure it's a FIXED RATE - get your credit squared away, arrange a payment plan with the hospital, stay CURRENT with EVERYTHING for 12 months, and then try to re-write the note at a more attractive rate.

Answer 4

Given the little information you have provided, this is the scenario you will face anywhere you apply. Low cost loans are just not out there for those who have significant issues in their credit files. If you DO find a lender willing to work with you, expect much higher interest rates and downpayment requirements.

Your FICO score is the item upon which they base their risk in giving a mortgage. The lower the score, the higher the risk is assumed to be.

Answer 5

I WOULD SUGGEST SWALLOWING YOUR PRIDE AND ASKING ONE OF YOUR PARENTS TO CO-SIGN AND PUT YOUR GIRLFRIEND AS THE PRIMARY BORROWER. IN THE MEANTIME IF YOUR UNABLE TO PAY THE JUDGMENT DECLARE BANKRUPTCY TO GET IT REMOVED FROM YOUR CREDIT. AFTER YOUR BANKRUPTCY HAS BEEN DISCHARGED YOU CAN REFINANCE THE HOME INTO JUST YOUR GIRLFRIEND AND YOUR NAME. EVEN IF YOU ARE NOT ON THE MORTGAGE NOTE FROM THE GET GO YOU CAN STILL BE PLACED ON TITLE TO HELP PROTECT YOURSELF! GOOD LUCK!