Financing in 02760>Question Details

Dawn, Other/Just Looking in North Attleboro, MA

I took a large paycut (30k) about 5 years ago. We relied heavily on our credit cards and got into some heavy debt.

Asked by Dawn, North Attleboro, MA Sun May 6, 2012

We want to sell our house, but I am afraid I wont get a new mortgage. If we sell, move into a rental for 6-12 months, we will have zero debt and approximately 100k for a down payment. Would I be in a position to secure a new mortgage? We never were late on the mortgage we currently have, Our credit took a big hit (lots of lates/defaulted on a store card).

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A mortgage broker would be best to answer your question, but a lot will depend on your fico score and your credit history at the time you apply which will be in 6-12 months as you state. And the fact you were never late on your current mortgage is also a good indicator. I would also seek out local savings banks who hold there mortgages.
1 vote Thank Flag Link Sun May 6, 2012
So a local credit union might be best? I thought if someone knew why we took the hit it might help. Previously our credit was great, but it took a dive (from high 7's to 630ish) Thanks Louis
Flag Sun May 6, 2012
You really need to sit down with a mortgage professional before you make a move
0 votes Thank Flag Link Wed May 9, 2012
Hi Dawn,

One of my previous clients had very similar situation as yours. It actually took them about 1 year and a half to see difference in their credit score. And they did not buy again until 3 years later...

Not sure whether that was standard timeline. Just wanted to share with you.

Yuan's Team Realty
0 votes Thank Flag Link Mon May 7, 2012
Hi Dawn....

Heavy debt is not necessarily going to hurt your chances for a new home, but the plan you have put into action is truly the best way to go (paying off debt and saving for DP). Never being late on the mortgage is an excellent fact, but as you have guessed, the other lates still affect your credit scores negatively.
A good loan officer could analyze your situation and help you formulate a strategy or help your strategy succeed by reviewing your position now, and in 6 months to a year. I often help people improve their credit, and we offer credit restoration strategies at no cost or obligation.

0 votes Thank Flag Link Sun May 6, 2012
Thanks Jim, I would be debt free and have the 100k for the down payment once my home sells (we have some equity) Do I have to wait the 6-12 months? I figured it would give me time to improve my fico...I have gotten a new position which restored my original income.
Flag Sun May 6, 2012
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