Financing in Granbury>Question Details

Shirley, Home Buyer in Spring, TX

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Asked by Shirley, Spring, TX Mon Jan 4, 2010

I have 20,000.00 and below par credit. (500 with foreclosures and other issues) I am retired and want to buy a home for my retirement years. I have 2700 guaranteed income per month and do not want to spend over 65,000 for a home. Is there a lender out there who would finance me in the Granbury - Austin area?

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Hi, Shirley

For FHA, you have to wait 3 years from the date the foreclosure was discharged before you'll be able to qualify for a new mortgage. The wait is 5 years for Conventional/Fannie Mae/Freddie Mac financing.

Furthermore, regardless of your income and savings, you won't be able to do anything mortgage wise until you get your credit scores up. For FHA, we, like most major lenders, require a 640 credit score. However, its my understanding there are some lenders supposedly still taking 580 and above credit scores. But that will probably be a case by case scenario and most people will not qualify.

In the interim, if you have no open and reporting credit (i.e. credit cards, auto loan ext...) you need to open a couple of credit cards to start rehabbing your credit. Premier Bank and HSBC specialize in offering credit to people looking to re-establish their credit. You can also possibly get a secured credit card from a local bank.
Remember make all your payments on time and always maintain a low balance ( 50% or less of credit limit).

If you're currently renting, that can be utilized as "alternative" credit by a lender to show your ability to make a mortgage payment on time. This is the very best form of alternative credit, and it It will be all the more influential to a lender if your current rent is equal to or greater than your new mortgage payment. You'll need at least a 12 month history for this. Again, no lates over 30 days. Hopefully this was helpful.

Rudy R. McDowell / Senior Loan Officer
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ShoreMortgage
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o: 800-678-6663 Ext 5154 / f:248-594-6156 /d: 313-410-1344
email: rmcdowell@shoremortgage.com
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1 vote Thank Flag Link Wed Jan 6, 2010
Shirley, you're wrong. Pfft.

People who pay their bills on time and don't get foreclosed upon and don't take on more debt than they can pay, somehow, miraculously, have really high credit scores.

People who don't, don't. And people who don't recognize how they wound up with low credit scores? That's called, denial.

But, care to explain how you have "had more than three persons obtain and actually pay for their homes through a wrap loan?"
0 votes Thank Flag Link Mon Jan 11, 2010
Shirley, for what its worth, I hope you enjoy your new home and have payments that will work out for you.

I did not say anything below except what I understood to be. I am shocked you got a loan, but in a good way.

I know, sometimes in life things happen. You lose a lot through no fault of your own. It can result in a low fico score. My reply below was to try to give you some ideas. I mentioned rent to own from the seller as I did not think anything else would work.

Since you had about 50% to put down, I think you should be able to handle what you need to financially for the house. Hopefully, you will be able to enter into retirement and enjoy your new life. I only hope whatever happened that put you in so much financial trouble will not be able to occur again. Thank you for coming back and letting us know about this new event in your new life.
0 votes Thank Flag Link Mon Jan 11, 2010
Thanks all...I found a home and the financing to accompany...this is all I really wanted and Mack...you have no information to support that a credit score represent how people live, work communicate nor handle their responsibilities. It is only a number! and measures nothing about people!! It is all about the life's situations which come your way..YOU Mack could find yourself in a similiar situation, remember one day can make all the difference in someone's life, so do not be so ready to judge or cast the first stone my friend. The home I purchased is small and I put down approximately 50% on a wrap loan. It is an old but credible method to own a home. I have had more than three persons obtain and actually pay for their homes through a wrap loan. It works and I am happy!
0 votes Thank Flag Link Mon Jan 11, 2010
Hi Shirley,

Or ... you could move to Panama or Mexico as a "pensionado" and live pretty darn well on that $2700/month ... It's gorgeous countryside. Both countries are #1 and #2 for ex-pats. And you can live in nearly any climate you want due to their many areas of elevation.

We spent nearly 2 weeks in Panama last year and it was AMAZING. The countryside is positively stunning, the people very friendly and the food yummy. Direct flights to there are cheap too! And you could have all sorts of tax benefits vs. staying in the states.

Just a thought ...
0 votes Thank Flag Link Wed Jan 6, 2010
Shirley, real estate agents tend to lead the league in self-empowerment and self-improvement, but the fact is, you defined your credit score - it doesn't define you.

It identifies you as someone who can't be relied upon to pay their bills on time and manage their debts, and there is some benefit in seeing yourself as someone who is responsible and able to pay their bills on time, as well as someone who is responsible for their 500 credit score.
0 votes Thank Flag Link Tue Jan 5, 2010
Thanks for all the great advice....I am not going to entertain a thirty year loan as I am 65 years old. I will sign a 10 to 15 year fixed loan. I thank the respondent who suggested owner-financed, that may be best for me as there are an incredible amount of home inventories for purchase across the nation. I do accept the challenge to strengthen my credit situation, but cannot allow it to define me and limit my search for home ownership during retirement years. This mortgage/real estate mess was created by the very institutions who are setting impossible limits for great people attempting to recover from the stranglehold of desiring a piece of the pie in America. Though I have narrowed my search for an establishment to help me with credit review and refreshing, Hannah I would like to see your book and consider your approach to refreshing my credit. So please send, I am sure many can receive much knowledge from your experience and expertise. I have long since abandoned credit cards use as a part of my life's choices and mostly pay cash for everything I own...I intend on being debt free. No dependence on third party lenders for me..I intend on being the lender not the lendee.

I wanted to find non-conventional lenders who is not driven by credit agencies with mostly out of date and erroneous information in making their credible lending choices...most people are not a credit risks and really are hurt by our nations preoccupation with numbers (credit scores). There are social lending groups I believe.

I will purchase this year with my 30 to 35% deposit, I will eliminate the erroneous information on the credit reports (which keep popping up as new after 15 years) this year.

I am depending on all of you in the mortgage/real estate/RE Financing world to straigthen this mess, you are missing a huge target population for the sale and resale of homes by attaching too much importance to a number. This mentality is hurting our children in education and it is hurting us even more in the recovery of the real estate market. Clean up the top three credit rating agencies, place some restrictions on THEM, their rating criteria changes at their own whim...the ratings are strictly used to limit, restrain and control access to housing and has created another money-making ventures for them-it really is all about money, isn't it?.

Thanks all from a baby-boomer home buyer who has seen these housing shifts before, it is only a number and does not define and will not restrain me/others from forging ahead with our dreams.
0 votes Thank Flag Link Tue Jan 5, 2010
Hi Shirley,

Since your challenge begins with your credit score you may want to work on improving your credit rating through credit education and credit repair program. You seem to have several negative trade lines showing up on your credit reports. I can assist you repair and rebuild your credit rating in 4-6 months. After which you can then see where you stand from a credit stand point and work with a local realtor to try to obtain a new home.
I also wrote a book how to return to homeownership after foreclosure so if you would be interested I can send that E-Book over to you. Good luck!

Hannah Fliegel
The Credit Restoration Expert
415-999-9348
0 votes Thank Flag Link Tue Jan 5, 2010
Shirley, you may want to make a fresh new start, but that doesn't mean the start begins in mid-field.

The brand-new start requires getting that credit score back up there, because 500 is simply unacceptable for somebody committing to a thirty-year mortgage.

You absolutely will be able to find financing.
0 votes Thank Flag Link Mon Jan 4, 2010
Shirley,

I think a lot of this depends on the time frame you are working with and how long before your foreclosure and "other issues" fall off of your credit score. Dan is correct when he states that you should work on your credit score. A good lender can guide you in the right direction and provide you with advice on how to bring your score up. If possible, stay away from the hard money lenders. The interest rates will eat you alive and you don't want that. Your goal is to become financially stable and it sounds like you are on the right path with your savings. You have basically saved up a 30% down payment if you plan on buying in the the $65,000 range. I wish you much success. Please let me know if you have any other questions. My email is truvaluerealty@gmail.com

Thanks!!

Jackie
0 votes Thank Flag Link Mon Jan 4, 2010
$32,400 a year. If social security you can multiply by 1.25 I hear)
$40,500 a year credited ( no taxes) income x 3 = safe mortgage. about $121,500 loan.

Now for the problem. 500 fico is so low you will not get a loan (right lenders?)

What you want to do is to talk to a lender or non-profit counseling service. Do not consolidate your loans. That will only drive your score lower. Find out what if anything you can do to increase your score. Take some time, get it up, then you can buy.

You have 2 other options. Both hard to find. rent to own, and lease to own. Find someone who wants to sell so badly (and has the house paid off) that they will sell it to you financing the whole deal them-self.

You may be able to find a hard money lender who would finance you. But their interest rates would eat you alive. You would be a lot better off to work on your fico score to improve it. Then in 1-5 years with good credit buy what you can afford.
0 votes Thank Flag Link Mon Jan 4, 2010
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