Home Buying in Warren>Question Details

Laura Atwell, Home Buyer in Warren, MI

i have bad credit but my partner and i have a stable income, will i be approved?

Asked by Laura Atwell, Warren, MI Sun Feb 8, 2009

MY HUSBAND AND I ARE WANTING TO BUY A HUD HOME. HE HAS A FEW THINGS ON HIS CREDIT TO CLEAR UP WITH HIS INCOME TAX RETURN, ONCE THAT IS PAID OFF; WE WILL HAVE BETWEEN 2,000-3,000 FOR CLOSING COSTS AND DEPENDING ON THE DAMAGE OR NEEDS OF THE HOME. UNFORTUNATLY MY CREDIT IS SHOT TO HOSPITAL BILLS, OLD PHONE BILLS, APARTMENT LEASES AND WHATEVER ELSE I MIGHT OF HAD. SHOULD WE MARRY AFTER THE HOUSE IS PURCHASED? WILL IT RUIN OUR OPPORTUNITY TO BUY IT OR WILL IT SHOW THE MORTGAGE DEPT THAT WE HAVE MORE INCOME FOR A REFERENCE TO PER SAY NO CREDIT? PLEASE HELP ME WITH THIS SITUATION...WE REALLY NEED A NICE HOME FOR OUR TWO CHILDREN AND AT THE SAME TIME WE ARE NOT FAMILIAR WITH REAL ESTATE, MORTGAGE COMPANIES AND WHATS BEST FOR US; BECAUSE THE WAY MICHIGAN IS GOING RIGHT AT THIS TIME.

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9
Just to clear some things, FHA requires 12 months with no credit issues, or a detailed explanation (within reason) of what happened to cause negative credit. FHA does require 24 months from bankruptcy. To purchase a HUD home and qualify for the HUD Incentive...the home must have a purchase price of $25,000.00 or over. On the loans that I have done with HUD, and I do a lot....HUD gave a $2,500.00 incentive plus 3% of the sales price for closing costs, prepaids, etc. Because it is a HUD home, instead of the normal FHA required 3.5% down, HUD only requires $100.00 down. There is NO PMI Insurance on a FHA mortgage, FHA has MIP Insurance and uses a much different system then PMI to grant the insurance and the monthly cost is less.
2 votes Thank Flag Link Tue Feb 17, 2009
Laura, If you are interested in buying a HUD home and are nervous or want to begin the process you may want to use these tools....

You could begin by using this Hud site to make use of their free counseling and advice in buying a Hud home...http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

You should find a Hud approved homebuyers course in your area....http://www.hud.gov/buying/localbuying.cfm .........you will recieve information on getting things done, local programs available to you and make contacts in your area...

Read through Hud Homebuyers site......http://www.hud.gov/buying/index.cfm .......This will explain the process, provide loan info, calculators, tons of good stuff you need to know..........

Go ahead and play around looking at Hud properties for sale in your area to get an idea of what's available. It will also explain the bidding process in your area for Hud homes...http://www.hud.gov/homes/

Good house hunting, Dunes
1 vote Thank Flag Link Wed Feb 18, 2009
Those who purchase a HUD home with an FHA loan only need $100 for their down payment... that is the great news. You can actually submit your offer for HUD to pay your closing cost... that is great news for you.

The bad news is that FHA requires the past two years on your credit be clean. If the past two years are not clean then it is unlikely that you would qualify for an FHA loan or for any loan today. Although FHA is not credit score driven private mortgage insurance is and your credit score can affect your ability to obtain an FHA loan if PMI will not approve the loan. Also, FHA has tightened their requirements and many mortgage companies have placed their own minimum requirements on FHA loans. I would really recommend that you contact a loan officer to access your credit situation. They can inform you of what you need to do to qualify and when you will be able to qualify if you follow their steps. I recommend Wells Fargo and have provided you with a loan officer below. She is fabulous and closes loans in all 50 states. Again, if your bad credit is 25 months or older then you might have an opportunity with FHA.

Kathy Terry
Home Mortgage Consultant
Wells Fargo Home Mortgage
M2044-021
770-497-6018 Direct
866-676-1044 Fax
404-285-3699 Cell
Kathy.Terry@Wellsfargo.com
http://www.wfhm.com\kathy-terry
Remember I can do loans in all 50 states!

Lastly, I would ask if you feel you are truly ready to purchase and maintain a home. Based on your own words above it sounds like you have had problems paying your obligations in the past... more than just medical bills. And your husband has a few things on his credit also. It could be that these items are not recent but adding a foreclosure to your credit would be devastating. I would recommend you really look at your budget and KNOW that you can afford and maintain a home before your purchase a home. A homes cost is more than just the mortgage payment.... there is maintenance, repairs, utilities, property taxes, etc. And yes, you will have tax benefits that will help offset some of the cost but you need to look at the entire picture and make an educated decision for you and your family.
Web Reference: http://www.HomesByLorie.com
1 vote Thank Flag Link Mon Feb 16, 2009
Laura,

I would definitely like to help you and your family. An FHA loan will be your best bet for bringing as little money to close as possible. As far as your credit, there are minimum requirements for purchase, and I will be able to give you a more accurate answer with some more information. Please contact me when you get a free moment so we can discuss your options.
0 votes Thank Flag Link Wed Feb 18, 2009
Credit is a concern, however medical collections aren't so bad. FHA is based upon character, things that are important is: "willingness to pay the debt(s)". Without actually seeing a credit report, I can't logically comment on work has to be done to get him credit qualified, but I would be interested in helping if you need help. Finally, if you finance a HUD home and the sales price is over $25,000.00 you can do a FHA loan with only $100.00 down and usually have FHA pay 3% of the closing costs and a $2,500.00 incentive. You might not need the extra money from your taxes. I hope this helps, have a great day!
0 votes Thank Flag Link Mon Feb 16, 2009
i agree that FHA is probably the way to go in your situation as your credit score will not come into consideration. however,you will need to come up with a 3.5% down payment.This can be a gift(not loan) from a family member. if this is not possible,I suggest you begin saving up as soon as you can.
0 votes Thank Flag Link Sun Feb 8, 2009
Good sunny day, Laura!

You ask good questions, and are thinking ahead of the curve. For that, I give you a lot of credit!

I have solid relationships with a few different loan officers, each with their unique specialty. FHA is a fantastic loan direction, and it will likely work very well for you.

Please email me offline, and I will be happy to connect you with the individual I feel can most positively manage your situation. I can be reached at Derek@DoorToDreams.com, and you can always visit our website at http://www.DoorToDreams.com

Look forward to hearing from you, Laura!


Derek Bauer, Associate Broker / Realtor
Real Estate One - West Bloomfield / Farmington Hills
734.678.4745
Web Reference: http://www.DoorToDreams.com
0 votes Thank Flag Link Sun Feb 8, 2009
good afternoon........if you are married before or after trying to buy the home really makes no difference......setting your husband up to purchase is the very first order of business....not looking for a home.........also, when buying a hud home, if there is a considerable amt. of deferred maintenance, the appraisal alone could kill the deal regardless of credit or anything else regarding your credentials......there is an fha loan that will loan you the cost of reapirs and the cost to buy that is a total nightmare, and i wouldn't suggest making an already difficult situation worse by attempting that.......i am licensed to do them, but never will..i have never had anyone tell me that these loans were a pleasant experience...striaght fha is the way to go..you do not need to buy a home that is in bad repair to get a great deal.....lastly.........if you have relatives that are willing to help in whatever capacity they can...that is definitley something to consider....there are many ways to get you in as a homeowner withour fixing all the ills of your file.........i hope that helps....bob mcclure......
0 votes Thank Flag Link Sun Feb 8, 2009
GREAT QUESTION: You have well thought out of the situations, BRAVO for you !.

Best contact a mortgage broker review your financial records, best for husband to resolve his credit issues which will increase his scores. Upon pay off it takes approx. 60 days report credit bureaus. After pay offs best then contact a lender NOT PRIOR it would be your benefit to "talk true shop" However if either you or he have credit cards never close an account it tanks your credit scores.

You would still need complete credit repair if the debt is over 2 years old, if less than 2 years better wait.

I have owned a credit repair company 10 years guest speaker for 1000's. Professional realtor, mortgage loan officer.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sun Feb 8, 2009
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