Since you have some time before you plan to purchase the mortgage person may give you recommendations on how to improve your credit to help offset the broken lease.
Best of luck to you! Happy to help if you have more questions about real estate in Round Rock!
Nicole Boynton - REALTOR
Austin Suburban Properties
Williamson County Association of REALTORS - Director
Round Rock Chamber of Commerce - Ambassador Chairperson
Who is buying the property both of you together? Did you file your taxes the past 2 years? The max. tax credit is $8,000, depending on the income. Yes, I agree with the other answers, you have to have a purchase contract before april 30, 2010 and close before june 2010.
Gabriella Marzorati - 78664
For the $8,000 tax credit, you need to go to contract on a home by April 30 2010 and close by June 30 2010. Once you close on the house, if you haven't filed taxes yet then your accountant/tax preparer will apply it towards your outstanding balance with the IRS. If you owe less than $8,000 then you will get a check for the balance.
If you do your taxes before you close on your home then once you close you would go back to your tax preparer who wil file and ammended return for you. It is not a big deal.
Follow the link below and look around the IRS website for more details about the credit.
Best of luck.
First, I'm surprised that more lenders don't even check on rental history. You can't rely on that, but I've had a number of tenants in a house I rent out who've gone on to buy properties. Maybe 5 or 6 in the past 25 years. Not once have I ever been contacted by any lender to verify residency, payment history, payment amount, etc. So you may not even run into that as a problem.
Second, you say that you and your fiance were struggling financially. Although your broken lease may not show up on your credit report, if you were late on other things (credit cards, utility bills, student loans, car loans) as a result of the financial difficulties, then those may show up on your credit report . . . and those could affect your ability to buy a home. So you absolutely need to know what your credit history is and what you'd qualify for. I personally would recommend a good mortgage broker, though there's a school of thought (reflected by Kelly's comments) that you should contact a lender directly. The advantage of a good mortgage broker is that he/she works with multiple lenders, each of whom have different criteria. One lender might say "no," while another could say "yes." Regardless of which one you choose, definitely choose one to get a better understanding of your credit report and to find out what you might qualify for.
Hope that helps.
That alone usually isn't enough to get your file declined.
Certainly, you will want to good positives to offset.
I am a Mortgage Banker. Pleasee feel free to follow up with any more questions
Good news to you is that this is real estate and if you want it bad enough, you can make anything happen with the right guidance. If you are considering Round Rock (78664), I would totally call Nicole Boynton below. Nicole is active with the Round Rock COC and the Williamson County Assoc. of REALTORS. I would be shocked if she couldn't give you the guidance on this. Also don't forget about the tax incentives $8,000 and $6,500 move-up. You should look to do something by April 2010 to maximize your benefits.
Best of luck,
I hope you are having a great morning!
I'm sorry to hear about your situation and, like all answers below, you really do not have to worry too much about a broken lease. Life happens. You are not the first home buyer to break a lease and I'm very certain you are not the last!
From here on out, I would not let anyone pull your FICO (credit) score unless you absolutely have to for other purchases. There is a way to check your credit history without pulling the score and that may be ok. A great banker will have ideas for you to build your credit also.
Is there a particular reason for purchasing later than sooner? The reason I ask is, you may be able to take advantage of an $8000 tax credit if you have a home under contract by April 30th, 2010 and have it closed by June 30th, 2010. Are you a first time home buyer or owned a home in the last three years? Also, I agree with Kelly about going for the USDA loan (very easy) program if you can. Feel free to call me an address and I will check it while we are on the phone to see if it qualifies for the USDA loan.
Finally, if you are going to invest in real estate, I highly recommend you hire a great REALTORÂ® (Buyer's Agent) to assist you. A good REALTORÂ® will help you locate property based on your criteria, show you property, look out after your interest, guide you with all the paperwork, recommend great lenders and take all the worries out of your hands. All you need to do is start packing! MOST IMPORTANTLY, In Texas, a buyer's agent will cost you nothing 99.999% of the time! Nothing to lose here!
Wishing you all the best for 2010!
Jeffrey Nyland, REALTOR, GRI, SRS
If you're not planning on a purchase for another 18 months, you won't need to do anything yet except check your credit report(s). If there is a problem with your credit, you will have plenty of time to address it. You will want to save as much money as you can and keep your credit use to a minimum...better yet, don't use your credit at all except in an emergency.
Once you're ready to start looking seriously at a move, then check get with your lender so they can pull your credit and determine if you're eligible for a loan.
I think you have some good answers here. The broken lease probably won't show up on your credit, unless it was through an apartment complex. Either way, talk with a lender and let them pull your credit and look over your finances. Chances are you have a good shot at getting a home. If you are a first time homebuyer is it possible for you to move up your purchase date? You could take advantage of the tax credit!! Good luck!!
What do you mean by you "HAVE a broken lease"?
If this means you do not currently have a lease on the place you are renting, then - BONUS - you will have no trouble getting out of your rental when you find a house.
If this means you are worried about obtaining a mortgage loan because you have a broken lease in your rental history, check with a lender, but I do not believe that would have any effect on your obtaining a loan. They are more concerned with your credit and work history, and a broken lease would not show up in a credit history.
My advice is to speak to a direct lender, NOT a broker. Brokers are typically paid fees for putting you together with a bank that you can find yourself and the bank tacks on extra fees to cover what the broker charged them. Talk to a loan officer at a reputable bank.
Also, if you are concerned with down payment or have a low credit score, but a decent payment history, ask a lender about the possibility of a USDA mortgage. I am in DC and not familiar with your area of Texas, but if it is classified by USDA as rural (which may be broader that most people think of as rural) then you may qualify for this particular mortgage program. Ex: Loudoun County, VA - the fastest growing county in the whole country and a suburb of DC, is actually considered to be 100% rural, with the exception of the city of Leesburg. The USDA mortgage is the only 100% mortgage out there, up to 103% (to include closing costs), does not include PMI and you only have to have a minimum credit score of 520 for most banks.
Also, if you don't have the minimum 520, then you could STILL possibly get the loan directly from USDA, you would just have to do all the paperwork yourself, which can be extensive, instead of having the bank handle all of it for you. I have a client who did this. It was a lot of paperwork, but she got her house.
Hope this helps.
Most likely you would be fine if your scores are high enough. It depends on if the lease is showing on your credit report and how recently it occurred. I am a mortgage broker and a Realtor in Austin so if you would like to discuss these issues regardless of your time frame please do not hesitate to call or email me.
Realtor | Mortgage Broker
Keller Williams | 360 Lending Group
Good luck. :)