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Lets say...
You had awful credit. Really bad. but you didn't need a loan to buy a house because you had enough money for the down payment and the mortgage.
Would credit affect one's ability to still buy a home if this were the case?
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Posted 9/8/09 2:02 PM  |
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Sweets13
Bella Bambini
Member since 5/05 9300 total posts
Name:
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Re: Lets say...
The only reason they do a credit check when buying a house is because you are borrowing money from a lender.
If you are buying a house and no loan is needed, then I don't see a reason for a credit check.
I could be wrong....
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| Posted 9/8/09 2:14 PM |
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saraH
happy birthday sweet kate!
Member since 5/05 16555 total posts
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I know that God exsists, I held her in my arms...
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Re: Lets say...
misread, sorry.
Message edited 9/8/2009 2:27:43 PM.
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| Posted 9/8/09 2:19 PM |
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Sweets13
Bella Bambini
Member since 5/05 9300 total posts
Name:
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Re: Lets say...
Posted by saraH
I think your credit would affect the rate you get on your mortgage.
if she doesn't need a loan then she won't need a mortgage rate, right?
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| Posted 9/8/09 2:21 PM |
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Mrs-D-Girl
Love my fur baby
Member since 8/07 5183 total posts
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Re: Lets say...
If you were getting a Mortgage, no matter how much you put down on your home, your credit will still be put against you.
If you were buying a home cash and no bank was involved, that would be a different story.
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| Posted 9/8/09 2:24 PM |
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saraH
happy birthday sweet kate!
Member since 5/05 16555 total posts
Name:
I know that God exsists, I held her in my arms...
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Re: Lets say...
Posted by Sweets13
Posted by saraH
I think your credit would affect the rate you get on your mortgage.
if she doesn't need a loan then she won't need a mortgage rate, right?
read it wrong, sorry.
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| Posted 9/8/09 2:27 PM |
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Re: Lets say...
But if you received a large sum of money, enough to put towards a down payment, but would need to pay monthly payments because you wouldn't be able to put the entire amount up front, bad credit would affect it? Would it be impossible to get a home, or just be possible with really high monthly payments?
Is there any way to "fix" bad credit? Other than paying everything off, when it comes to getting a home? Even paying everything off I know doesn't erase the history...
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| Posted 9/8/09 2:33 PM |
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Sweets13
Bella Bambini
Member since 5/05 9300 total posts
Name:
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Re: Lets say...
If you want to buy a home and don't have ALL of the money to purchase the home, then you will need a loan for the balance.
Yes, your credit will affect you getting approved for a mortgage. If you do get approved for a mortgage loan your interest rate will most likely be very high.
Message edited 9/8/2009 2:41:16 PM.
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| Posted 9/8/09 2:39 PM |
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Mrs-D-Girl
Love my fur baby
Member since 8/07 5183 total posts
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Re: Lets say...
Posted by lipglossjunky73
But if you received a large sum of money, enough to put towards a down payment, but would need to pay monthly payments because you wouldn't be able to put the entire amount up front, bad credit would affect it? Would it be impossible to get a home, or just be possible with really high monthly payments?
Is there any way to "fix" bad credit? Other than paying everything off, when it comes to getting a home? Even paying everything off I know doesn't erase the history...
Your credit would effect you, BUT my advice to you would be to call a Mortgage Broker and discuss your situation and see what they say. From experience, dealing with a bank directly has become a nightmare to me and when I dealt with a broker 100% easier. You can't lose anything by asking questions  . It's very difficult to get money from banks these days even with excellent credit, they are making it really tough for people to get loans 
Message edited 9/8/2009 2:44:57 PM.
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| Posted 9/8/09 2:43 PM |
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Sweets13
Bella Bambini
Member since 5/05 9300 total posts
Name:
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Re: Lets say...
Posted by lipglossjunky73
But if you received a large sum of money, enough to put towards a down payment, but would need to pay monthly payments because you wouldn't be able to put the entire amount up front, bad credit would affect it? Would it be impossible to get a home, or just be possible with really high monthly payments?
99.999999% of people put down money for a down payment on a home. Your mortgage loan is for the balance which is why there are monthly mortgage payments.
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| Posted 9/8/09 2:44 PM |
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Re: Lets say...
Thanks ladies. I feel so stupid about this stuff. and we are no where near buying a home anytime soon. however, there might be a possibility before Cailen is in Kindergarten that we will be able to do this. The only thing that gets me nervous is my awful credit - but DH's is worse. If my credit is better than DH's, and i put it in my name and not his, does that help at all?
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| Posted 9/8/09 2:48 PM |
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Sweets13
Bella Bambini
Member since 5/05 9300 total posts
Name:
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Re: Lets say...
Posted by lipglossjunky73
If my credit is better than DH's, and i put it in my name and not his, does that help at all?
YOUR debt to income ratio will have alot to do with getting approved for a loan along with credit score. They will look to see if YOUR yearly salary can cover the money going towards your debt along with the monthly mortgage payment.
Message edited 9/8/2009 3:06:14 PM.
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| Posted 9/8/09 2:57 PM |
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Smileyd17
kids
Member since 5/05 20997 total posts
Name:
Mommy
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Re: Lets say...
Better credit will help in your rate.
Best thing to do is build your credit up now as best as you can...seems like you have time.
Also, worse case would be a high interest rate and then you can refinance for a better one.
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| Posted 9/8/09 2:59 PM |
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MST9106
My life:)
Member since 6/06 9589 total posts
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Re: Lets say...
Unless you have enough money to completely cover the payment for the entire house (no need for any loans), you should focus on fixing your credit. Why not use the money that you receive towards paying off all of your debt? That in itself will build up your credit, after which you should maintain it for a year or so until you are ready to buy the house.
Message edited 9/8/2009 3:01:23 PM.
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| Posted 9/8/09 3:00 PM |
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Sweets13
Bella Bambini
Member since 5/05 9300 total posts
Name:
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Re: Lets say...
Posted by Smileyd17
Also, worse case would be a high interest rate and then you can refinance for a better one.
I wouldn't even depend on refinancing. Look at all the people who lost their homes because they weren't able to refinance.
If you are not able to get a loan with a decent interest rate then it's not time to purchase a home.
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| Posted 9/8/09 3:10 PM |
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Mrs-D-Girl
Love my fur baby
Member since 8/07 5183 total posts
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Re: Lets say...
First off, no question is a stupid one!! Believe me, I knew nothing when I first bought my home and learned almost everything from people on here, so ask away.
I would agree that if you have money that you are coming into, I would work on fixing your credit score and paying off those bills before you get into a home.
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| Posted 9/8/09 3:37 PM |
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smdl
I love Gary too..on a plate!
Member since 5/06 32461 total posts
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me
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Re: Lets say...
I seems you do have time before the situation occurs.
You can go and "fix" your credit or at least make it better. I suggest you talk to an accountant/financial advisor. They will guide on what to do.
For example you can write letters to the agencies on why you were late on such and such payment. If you were disputing a charge on a CC and it slipped one month.
But if you have 2-3 years, you can definitivelly improve your credit score (lifestyle change, CC purchases,etc..)
The poorest your credit score the least you will be able to borrow and the highest the interest rate. You will always find a lender. The interest rates really depend on your credit score (and DH if he is on the mortgage papers).
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| Posted 9/8/09 4:45 PM |
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Re: Lets say...
I highly suggest you get your hands on a book called "Mortgages 101"-it became our bible when we were purchasing our home..if you have questions, please FM if you'd like, DH is an accountant who can put things into plain English very well...best of luck!
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| Posted 9/8/09 6:00 PM |
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skew
LIF Adult
Member since 5/05 6794 total posts
Name:
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Re: Lets say...
Posted by Sweets13
If you want to buy a home and don't have ALL of the money to purchase the home, then you will need a loan for the balance.
Yes, your credit will affect you getting approved for a mortgage. If you do get approved for a mortgage loan your interest rate will most likely be very high.
ITA. in addition, even if one has liquid cash to purchase a home outright IMO, it is not the wisest financial decision to do so.
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| Posted 9/8/09 6:05 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Lets say...
Posted by lipglossjunky73
But if you received a large sum of money, enough to put towards a down payment, but would need to pay monthly payments because you wouldn't be able to put the entire amount up front, bad credit would affect it? Would it be impossible to get a home, or just be possible with really high monthly payments?
Is there any way to "fix" bad credit? Other than paying everything off, when it comes to getting a home? Even paying everything off I know doesn't erase the history...
There is no quick fix for repairing credit, other than paying off any existing debt and getting your debt to income/credit ratio as attractive as possible. If your credit is bad due to late payments, the only real fix is time. The older the delinquencies, the better your credit gets.
If you have late payments on credit accounts you still have a balance on, you can *try* to plead to the credit company and ask them if they would be so kind to remove the delinquency off your credit report in exchange for payment of the debt in full. This will most likely get denied, but you never know.
As far as getting a mortgage with a large down payment, how much of a down payment are we talking about? 10% definitely won't cut it. 20% probably won't cut it, but a lender may give you a mortgage at a high interest rate.
If you are putting something large down, like 50%, a bank will probably give you a mortgage if you can show you have good income. The reason for this would be even if you default, they have half equity in the property and could probably sell it at a profit if you default.
Just my two cents.
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| Posted 9/8/09 6:15 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19461 total posts
Name:
L
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Re: Lets say...
What I was always told was that even if you have bad credit, just lump sum paying off your balance will not help improve it immediately. What will is
- to pay on time consistently.
- pay off your debts.
- have a low amount of debt to available credit.
- not have declared bankruptcy.
Message edited 9/8/2009 7:14:25 PM.
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| Posted 9/8/09 7:13 PM |
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DRMom
Two in Blue
Member since 5/05 20223 total posts
Name:
Melissa
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Re: Lets say...
Posted by ave1024
Posted by lipglossjunky73
But if you received a large sum of money, enough to put towards a down payment, but would need to pay monthly payments because you wouldn't be able to put the entire amount up front, bad credit would affect it? Would it be impossible to get a home, or just be possible with really high monthly payments?
Is there any way to "fix" bad credit? Other than paying everything off, when it comes to getting a home? Even paying everything off I know doesn't erase the history...
There is no quick fix for repairing credit, other than paying off any existing debt and getting your debt to income/credit ratio as attractive as possible. If your credit is bad due to late payments, the only real fix is time. The older the delinquencies, the better your credit gets.
If you have late payments on credit accounts you still have a balance on, you can *try* to plead to the credit company and ask them if they would be so kind to remove the delinquency off your credit report in exchange for payment of the debt in full. This will most likely get denied, but you never know.
As far as getting a mortgage with a large down payment, how much of a down payment are we talking about? 10% definitely won't cut it. 20% probably won't cut it, but a lender may give you a mortgage at a high interest rate.
If you are putting something large down, like 50%, a bank will probably give you a mortgage if you can show you have good income. The reason for this would be even if you default, they have half equity in the property and could probably sell it at a profit if you default.
Just my two cents.
Not necessarily true. If you ave accounts that are in collections you will see that sometimes you'll get letters for the same debt form multipke companies. This is because the original creditors write off your debt and then sell it for pennies on the dollar. It is very time consuming but you can demand these companies "validate" your debt. Most can't as they would need to provide original signatures. Check out creditboards.com. they have step by step instructions. I had a credit repair company at one point and raised people's credit scores over 100 points by using their rights under federal law.
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| Posted 9/8/09 7:40 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Lets say...
Posted by DRMom
Not necessarily true. If you ave accounts that are in collections you will see that sometimes you'll get letters for the same debt form multipke companies. This is because the original creditors write off your debt and then sell it for pennies on the dollar. It is very time consuming but you can demand these companies "validate" your debt. Most can't as they would need to provide original signatures. Check out creditboards.com. they have step by step instructions. I had a credit repair company at one point and raised people's credit scores over 100 points by using their rights under federal law.
Well yes if you are in collections, it's a different story and a different strategy alltogether. You are right creditboards.com is a great site. I post there frequently.
I am just saying if you were late on a payment on an active account. You can have a few late payments with credit cards and not be in collections.
They usually don't bother with third party collections until you are at least 60-90 days past due. But yes if you are in collections, you can fight that. But remember removing collection judgements off your report won't remove the original delinquent marks that the creditor left.
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| Posted 9/8/09 8:37 PM |
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: Lets say...
You should also probably run your own credit as well as your husbands which you are entitled to do for free once a year, and that way you can see exactly what is on there. (You shouldn't have to pay)
Definitely try to pay down as much of the debt as possible. That will help your score.
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| Posted 9/8/09 10:10 PM |
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