Purchasing a house with bad credit joint application?

Hello -

May I ask which state you are located? This is important as certain program vary by state. While the FHA programs are available to first time home buyers, they take on average of 45 days to close the transaction

While you each earn $48,000 and $36,000 respectively, is that money deposited into a bank account each month?

The reason I ask is that if you have either 12-24 months showing your income, often times we can arrange for a similiar interest rate to that of a W-2 person.

What are the lenders telling you that is the major issue at hand? Often times we can arrange for realtors to move back the loan contingency? Are you buying your home through a relator?

You first need to understand the difference between banks and individual mortgage originators. Banks handle savings accounts, car loans, investment accounts, etc… Mortgages are just one of many services they provide. We’re different because we only deal in mortgage loans. We sleep, eat, and breathe mortgage loans and nothing else. Would you go to a general physician to have heart surgery performed? Of course not. So why go to a big bank, when what you need is a President?

As you have just learned, your mortgage lender is your friend. You are their client, and they are on your side. Because of this, you need to be completely honest and openly discuss past financial difficulties. This will make it easier for the lender to gauge your situation and provide you with best loan for your needs. If you hold back information and the lender finds out later, it could greatly affect the speed and difficulty of obtaining your loan. Remember, honesty is the best policy...

Bad credit is OK in many cases. The lender is not worried as much about the past as they are of your ability to repay the mortgage loan in the future. Basically, if you’ve had credit problems in the past, the mortgage company will look at those problems and ask the following questions:a.) How far in the past are your credit problems? (i.e.- if you had

multiple delinquencies on your credit card this year, you might

not be able to obtain a loan)b.) If your credit problem is in the past, is it likely to recur again?c.) Is whatever it is that caused your credit problem gone, or is it

still present today?d.) How good is the probability that you will pay your bills faithfully

every month from now on?

– Don’t Touch Those AccountsOld Accounts: If you have old, unused accounts on your credit report, don’t close them before applying for your mortgage loan. One of the factors that affect your credit score is the ratio between your credit limits and how much you owe. Closing accounts will make this ratio go up, which can severely impact your credit score.New Accounts: Don’t open any new accounts in the months preceding your mortgage loan application. New accounts can affect your credit score in a negative way for a number of reasons. The main reason is that every time you open an account, they are required to pull a copy of your credit report. If you pull a credit report too many times in a short period, this will make your credit score decline. Just say no to new accounts...

Please let me know if you have any further questions, and good luck.

Have you considered going off your bank statements (most lenders request 12 months, and not the 24 months as stated above) 12 month bank statement program is considered full doc - and you get the full doc pricing with a lender. Do you deposit any of you income into her account? If so, the better. Means she makes more.

YOur lender may try to re-pull her credit - it may have gone up - you never know - Some Credit agencies (for example, I use Advantage Credit) some use Landsafe (countrywide uses them), there are numberious places that a Lender will pull credit from. Some pull higher, than others....have seen it done. Has your broker / Lender called where he pulled your credit, and asked what he /you can do to rise it up 2 pts......Sometimes, just paying off a small charge card - or a medical bill will pull your credit up. I work with my credit reporting acency all the time for my clients, to get their credit raised. That is one option. If he /she has not done that for you, ask them, or go with another Broker. BUT, see if you can get an extension on your purchase....Realitors, do not like fall-out's, so they might be motoviated in talking to the seller on your behalf - and the seller most diffently wants to SELL.

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.

ACOUSTIC HOME LOANS WILL DO 100 PERCENT STATED CONDO PURCHASE WITH A 600 FICO SCORE. AT LEAST THEY USE TO - WOULD HAVE TO CALL THEM TO SEE IF THEY STILL DO.

Or you can get a stand alone 2nd, for 10 percent - and finance the remaining 90 percent on her score going stated income. I know it is confusing. And time is short for you. The easiest would be if you had a credit card you could put some money on - and turn around and refinance in 6 months to a year. SO ask your lender if you can have a no pre-payment on your loan. They will hike up your rate by .25 but well worth it, than paying 3 percent of the loan amount - compute what your interest would be for a year at your rate now - and what it would be at the new rate x 12 months. Than compute your loan amount by 3 percent. Compare the dollar amounts.

Not sure if I have helped or not - But good luck to you both-

This is a difficult situation. With your score being sub 500 not many lenders even want you on the loan. Your fiance's credit is actually high enough for a few lenders to go stated with but the hard part is convincing and underwriter that she alone can make this mortgage payment on her own. Most lenders are going to look her position on www.salary.com and see if it is between the ranges. You might be able to use 12 month bank statements with her but it doesn't sound like 36k a year will qualify her alone. Is there anyone else who would be willing to go on the loan with her instead of you? If that isn't an option you may need to rent and work on your credit score. Unfortunately it sounds like a Mortgage Consultant gave you a prequalification without doing a little homework on you loan criteria. As far as your Earnest Deposit you should be able to get it back as most contracts state that if you are denied financing you are eligible for a refund. It may vary from state to state so you will need to talk to your Realtor. I hope this helps but if you need any help please email me tadgeman@yahoo.com.

There are no income verification loans that would be available. That would help with your wife. There are also sub-prime lenders who would finance the house. There are some lenders who will do both. You'd need to look for a "porfolio" lender. That's one that keeps the loan in their portfolio rather than sell the loan to Fannie Mae. Make sure you read the terms very, VERY carefully however. There are many unscrupulous sub-prime lenders.

Another way to finance the mortage would be through the FHA. Call a lender such as Cendant (1-800 Cendant) or hit Wells Fargo's Web site (www.wellsfargo.com). FHA has recently relaxed their rules on the process so it's a lot easier than it used to be. However, they may require a small downpayment--maybe 2%.

Hi There,

i just closedon a purchase loan for a client, with a stated loan and a 600 credit score. They qualified for 100% financing, and so will you..

With your wives middle score at 618, we can state her income to what we need to qualify you for the house..

You obviously NEED to act quickly with the timeline you ahve indicated...

My name is Jason Fry, and I am a loan officer with Providential Bancorp, a nationwide mortgage lender. We work with over 80 lenders , most of which specialize in the sub prime market (low credit, high LTV, etc) I'd be happy to assist you in a purchasing this house..

Feel free to give me a call at 312-264-6448, or

you can email me at Jasonf@providential.com.

Thank You,

Jason Fry

Providential Bancorp

312-264-6448

i dont know the practice there in your country but here we do like this:

a) if the income is not enough to avail of the financing, a tacked-in is allowed, it means you will get another co-borrower within the 2nd degree of consanguinity so that his/her income will be considered as supplement to your income (only to a maximum of 3 borrowers in a loan)

b) if you have other income aside from your employment, you can make use of it, like you have business whatsoever, you can present your mayors permit, sec registration, etc and financial statements to the financier for consideration

c) if you have savings, you can pay part of the loan that will serve as your equity so that you can avail of a lower loan value

d) if you dont have savings, you can borrow from your close relatives and pay equity to the financier

you have to understand the part of the financier why they are so strict in assessing the financial capability of the creditors, that is, they want assurance that the money that will be lend out will flow back to the company....

worst comes to worst, i suggest that you look for another house that will work out within your available budget.