Buying a house?

Question

kay well theres this really nice house i want to buy. but i have a yucky credit score because of my soon to be ex-husband ruined it on other women. the person there said that they will pay off my credit so i can buy a house there. is this true? has anyone done this? did it work? well also my step dad said he did it before when he had bad credit and he got a house. but that was in louisiana but i live in virginia. please help?

oh also im a first time home buyer if that helps much?

Answer 1

Well credit score is only ONE factor in the home buying process.

Some people can get away with bad credit scores if they can get a good downpayment and have good income. The mortgage company will look at these factors also.

It also depends just how "yucky" your credit is. I was watching a show on CNBC about buying a home and credit scores. The expert was saying that something like 80% of people with credit scores below 600 dont end up making any, or very little money on there home. His general point was that even if you do get a loan with a bad credit score, your interest rate will to high for you to really make money back on the home. You will end up paying to much interest.

So you really have to ask yourself if you "need" to buy a home at this time. Or can you wait a few years, get your credit in check, and then buy a home.

Answer 2

An underwriter among many things when reviewing your application, they look to your "character" and "capacity". You credit history (character) and your credit balances (capacity) are two different things.

When you apply for a mortgage an underwriter is going to look at your credit report, and look to see if you have outstanding collection accounts, charge offs, late payments, etc. They are going to look at how you have handled credit in the past. It is okay to have had trouble, but they generally want to see that you have figured out what ever causes you trouble and been able to pay things on time for a year, or more since your last late payment, or collection account. What kind of "character" do you have with your bills. I understand that divorce is a very tough, challenging time in your life and you are not the first person to have credit troubles, and you won't be the last.

"Capacity" looks to if you can afford to buy the house. Do you have enough income to afford to buy the property and pay for your debt. You can sometimes pay down installment debt to qualify (car loans, personal loans, but not credit cards). The seller is limited in how much they can help you, most loans they can not help you more than 6% of the purchase price towards any assistance on closing costs, etc., so paying down debt by way of the seller generally never works, there isn't enough money to do so.

Check out your states first time buyer program, if you are going to be able to afford the house, this is the way. I put a link in the answer to check out the site for more information. You may also want to look into doing some credit repair before trying to buy and I've put a link to a blog that has some credit repair tips on it as well below.

Good luck in your plans to buy a house.

Answer 3

Please don't do this! Sometimes, companies promise to pay off your credit card or other debts when you buy a house. What they do is total everything, then roll it into the price of your loan. Because you have bad credit in the first place, your interest rate will probably be high to start off...but then they add an extra 10K or 12K and that could make your mortgage payment skyrocket.
Take care of the bills on your own and don't buy a home until your credit is mortgage-ready. I've seen SO many people want to take the path of least resistance and wind up in a heap of financial trouble all because they didn't want to wait...they didn't want to take the time to clean up their credit and do things the right way. Basically, don't rely on your mortgage company to pay your debts. You'll pay for it in the end.

Answer 4

i have some additional questions to see if this makes sense.

Who is going to lend you the money to buy your house? the bank or the seller?

If you are planning on having a bank lend you the money, it's going to take 30-60 days for your credit report to reflect the reduced balances.

Also, you need a bank or broker to evaluate your credit to see if that's the ONLY reason your credit is shaky.

If a seller is willing to payoff your credit cards for you, you need to let them know that if your credit doesn't improve enough in order for you to buy the house, that you won't have the ability to pay them back. I'd put together a contract. I certainly understand their motivation, but there is a piece of the puzzle that's missing.

You can call me for further information and maybe we can talk about what you need to do. If I can help you, I can also put your mortgage together for you. [e-mail] or caseycasperson.com. My cell number is on my website.

Answer 5

Here are many first time home buyers programs available. You may start by calling the city Housing Office in your city or the county housing officemortgage brokers or institutions that are authorize to administer the program. These agencies are normally listed on a pamphlet.

Answer 6

if you owe like 10,000 or so, the agent or home owner may be willing to pay it off cause they will be making such a large profit on the house.....

I would be a little skeptical about this... becuase just cause they payoff you debit dosen't mean the Bank will approve your mortage... so the guy who gave you all that money up front will lose his money.. then you might have to pay it back fast...

Sounds doable, but whatch out for fast talking deals...

Answer 7

Hello T. I found interesting information about your answer & HOME LOANS options here. http://all-debt-consolidation-loan.blogspot.com/2007/08/home-loans.html Good luck!