One w/bad credit, high DTI%, ignorant about mortgages LONG

[MBCoF]

OK first off Guys and Gals Thanks for the help and advice secondly please understand that I am scared to death about trying to buy a house because I’m completely ignorant about the process.

Here is the info about my wife and I and our situation…

I had ruined my credit in 1996 when I was 21 I had a truck repo (GMAC) and 3 credit cards that I quit paying on(Sears, JC Penny and Conoco). I never filed bankruptcy and never heard from any of them. In 1998 it went to a truck driving school that was to be paid by my employer. The trainer was making false entries into my log book so I quit and the school was charged to me. I had refused to pay due to the situation with the trainer but I did call the school last year and offered them $500 to settle and they agreed. I told them if they would send me a letter stating that the $500 settlement was excepted I would send them a cashiers check. They sent me a letter but it said that debt had to be paid by Friday and I received the letter Saturday a day late so I did nothing but I’m sure I can still settle for the same $500. I ran my credit through all three CRA’s and GMAC(I ran it 6 years and 11 months after the repo) was only on one(TU I believe) and the cards were not on any and the school was on all three. I have not had my credit ran since 95 except last year when I ran it see just what is on it.

Learning from my mistake we have made sure that every bill has been paid that is in my wife’s name. We started building her credit in 1997 sometime and have had one 30 day late pay on a truck lease through GMAC in Jan 1999 nothing since. I don’t know if the following info is needed but it can’t hurt…

 

1997 Small $300 loan to get started

1997 Small $1000 loan on motorcycle

1998 3 year Auto Lease GMAC one 30 day late paid in full

1999 5 year note on Motorcycle paid off due to trade in Spring of 2000

1999 Visa Card $4700 Balance

1999 Master Card $1700 balance

2000 5 year note on new car paid off fall 2002 due to combining 3 loans into one

2000 5 year note on motorcycle paid off summer 2001 through insurance total loss

2001 5 year note on new truck paid off fall 2002 due to combining 3 loans into one

2001 5 year note on ATV paid off fall of 2002 due to combining 3 loans into one

2001 $3000 loan (very high interest) we had to refinance last year due to family emergency (we need cash ASAP) Balance $4700

2002 combined the above Truck, Car and ATV on a 36 month note truck and car paid off due to trade in on new truck 2004

2003 $5000 personal loan $3500 balance

2004 3 year GMAC lease (traded it in 2 months after purchase)paid in full

2004 3 year note on the ATV that was left after trading the other two items on the note

2004 6 year note on new truck

2004 applied for Discover Card to do 0% balance transfer of other CC’s(no responce yet)

2004 $4000 credit limit at furniture store $2400 balance

 

As you can see the wife has quit a bit of trade lines the car, 2nd truck, ATV, motorcycles and $5000 personal loan is through our bank.

All of our utilities are in her name the only thing that I am listed on is the lease for our home.

The balances on the credit cards and loans other than the truck is about $22,000 payments run about $900 a month combined (this is the reason that I have never looked into a mortgage DTI%)

 

Rent $850

Utilities approx $200-$250

Truck $521

CC’s and Small loans $900

Her income $380 gross a week before any bonuses

My income $627 gross a week before any bonuses

I have been with the same company for 3 ½ years and have a 3 year agreement with them

She just started working with me this spring she was hurt on the job last year and was forced to light duty at min wage part time and nothing verifiable before that so previous income looks horrible.

Finally my question…

It was suggested to me that we find a home that lets say appraises for $160,000 but can be purchased for $145,000 try to finance at 100% or 103% (of the appraised $160,000) take the difference and pay off the credit cards and small loans to get the DTI% down. It sound good and looks good on paper but is this possible?

Should we pay off debt or save a down payment and forget about 103% loan?

Should I get a secure credit card and a small loan (because of my credit) or does it matter?

Should we wait to even start because of the inquiries on my wife’s credit as of lately (5 or 6 in the last 3 months)

I have now idea what our FICO scores are and don’t want another inquiry if its not going to even be possible to do. I’m sure mine sucks. I have no clue about hers her history is above.

Thanks again for the help and I’m sorry about how long it is I just thought the info would help.

[fla-tan]

OK first off Guys and Gals Thanks for the help and advice secondly please understand that I am scared to death about trying to buy a house because I’m completely ignorant about the process.

Here is the info about my wife and I and our situation…

I had ruined my credit in 1996 when I was 21 I had a truck repo (GMAC) and 3 credit cards that I quit paying on(Sears, JC Penny and Conoco). I never filed bankruptcy and never heard from any of them. In 1998 it went to a truck driving school that was to be paid by my employer. The trainer was making false entries into my log book so I quit and the school was charged to me. I had refused to pay due to the situation with the trainer but I did call the school last year and offered them $500 to settle and they agreed. I told them if they would send me a letter stating that the $500 settlement was excepted I would send them a cashiers check. They sent me a letter but it said that debt had to be paid by Friday and I received the letter Saturday a day late so I did nothing but I’m sure I can still settle for the same $500. I ran my credit through all three CRA’s and GMAC(I ran it 6 years and 11 months after the repo) was only on one(TU I believe) and the cards were not on any and the school was on all three. I have not had my credit ran since 95 except last year when I ran it see just what is on it.

Learning from my mistake we have made sure that every bill has been paid that is in my wife’s name. We started building her credit in 1997 sometime and have had one 30 day late pay on a truck lease through GMAC in Jan 1999 nothing since. I don’t know if the following info is needed but it can’t hurt…

 

1997 Small $300 loan to get started

1997 Small $1000 loan on motorcycle

1998 3 year Auto Lease GMAC one 30 day late paid in full

1999 5 year note on Motorcycle paid off due to trade in Spring of 2000

1999 Visa Card $4700 Balance

1999 Master Card $1700 balance

2000 5 year note on new car paid off fall 2002 due to combining 3 loans into one

2000 5 year note on motorcycle paid off summer 2001 through insurance total loss

2001 5 year note on new truck paid off fall 2002 due to combining 3 loans into one

2001 5 year note on ATV paid off fall of 2002 due to combining 3 loans into one

2001 $3000 loan (very high interest) we had to refinance last year due to family emergency (we need cash ASAP) Balance $4700

2002 combined the above Truck, Car and ATV on a 36 month note truck and car paid off due to trade in on new truck 2004

2003 $5000 personal loan $3500 balance

2004 3 year GMAC lease (traded it in 2 months after purchase)paid in full

2004 3 year note on the ATV that was left after trading the other two items on the note

2004 6 year note on new truck

2004 applied for Discover Card to do 0% balance transfer of other CC’s(no responce yet)

2004 $4000 credit limit at furniture store $2400 balance

 

As you can see the wife has quit a bit of trade lines the car, 2nd truck, ATV, motorcycles and $5000 personal loan is through our bank.

All of our utilities are in her name the only thing that I am listed on is the lease for our home.

The balances on the credit cards and loans other than the truck is about $22,000 payments run about $900 a month combined (this is the reason that I have never looked into a mortgage DTI%)

 

Rent $850

Utilities approx $200-$250

Truck $521

CC’s and Small loans $900

Her income $380 gross a week before any bonuses

My income $627 gross a week before any bonuses

I have been with the same company for 3 ½ years and have a 3 year agreement with them

She just started working with me this spring she was hurt on the job last year and was forced to light duty at min wage part time and nothing verifiable before that so previous income looks horrible.

Finally my question…

It was suggested to me that we find a home that lets say appraises for $160,000 but can be purchased for $145,000 try to finance at 100% or 103% (of the appraised $160,000) take the difference and pay off the credit cards and small loans to get the DTI% down. It sound good and looks good on paper but is this possible?

Should we pay off debt or save a down payment and forget about 103% loan?

Should I get a secure credit card and a small loan (because of my credit) or does it matter?

Should we wait to even start because of the inquiries on my wife’s credit as of lately (5 or 6 in the last 3 months)

I have now idea what our FICO scores are and don’t want another inquiry if its not going to even be possible to do. I’m sure mine sucks. I have no clue about hers her history is above.

Thanks again for the help and I’m sorry about how long it is I just thought the info would help.

 

MB

 

First let me welcome you to the Mortgage Forum. I hope that you enjoy your stay with us. Without knowing what your wife's credit scores are, I really can't give specific responses. However, if there are no lates showing on your wife's credit then she could well have sufficient socres to be able to qualify for a No Doc mortgage. With that type of mortgage, neither employment nor income information is required. She has sufficient tradelines so that should not be an issue.

 

Good luck to you.

 

 

fla-tan

 

 

fla-tan

Forum Moderator

[MBCoF]

Fla-tan

Thanks for the reply I said I wouldn't do it but I did I went and got the wifes FICO score.

 

Equifax score seems to be very low to me at a 606 but she has had 11 inquiries this year(6 in one day from car lot) and one last year. That I'm sure has brought the number down. But I have found that there was 2 30 day past due on the same GMAC lease 12/98 and 1/99

The truck that was just leased in April and traded in June still shows as an open acct which shows the balance of open accts $20,000 more than is owed.

Trans Union was 661 and shows a collection item that we do not know where its from??? TU only shows 3 inquiries

Thanks again