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Hi, I have been away for a few weeks dealing with this stuff, and I have been hesitant to post about this, but I've been not making much progress and I was hoping someone could help point me in the right direction (if there is a direction at all). This is really long but I don't want to mislead anyone about the complicated aspects.
In previous threads, I've said things to the effect of I was unlikely to need a mortgage in the next 5 years, but of course, that has changed. Nearly seven years ago I bought a house with my parent in that parent's name; I am not on the deed and I know this is the main takeaway from this post. As I've alluded in other threads, my house has an apartment and that parent unilaterally decided to allow my sibling to stay in the apartment without paying rent, and asked me to contribute more to cover this person and whoever they happened to be dating at the moment.
In what is a super long story, that sibling badly wanted my house (which I chose, and did all the closing work, and signed the first set of contracts, etc etc) as of this year. In my broader and weirdly close family, this house has always been a point of contention because I found it at an insanely low price, discovered that it was actually a rare legal two family, and fought for that to survive closing. It is also waterfront, and has gone up in value since we bought it.
At the beginning of this year, parent decided to do minor construction to give sibling more space, in the process eliminating parent's bedroom, parent has another house in another state that is now their primary residence. Sibling immediately initiated a campaign of constant complaining to parent, with what I suspect was an end goal of parent agreeing to "give" her our house. (I have put about $150K into it, sibling has paid rent a total of six times.) There is a lot more to this, but sibling successfully triangulated that parent to believe I am making sibling's life difficult out of envy or something. Parent buys this story, and was separated from me for the duration of the year due to covid in the house etc.
Part of my initial objection to construction was that I was certain my sibling would have a third child by this third partner imminently, making the construction obsolete. Parent said sibling was "not that stupid," but if they did that, they'd have to leave. Six weeks later, sibling both got covid and got pregnant. 😕 (My proposal was to rent the apartment and give sibling the proceeds.)
In July, parent asked me to meet them at the office of the lawyer who did the closing, and indicated they wished to sell the house, to which I said great, I would like to buy it. (I have a cosigner.) Parent and the lawyer asked me to borrow an additional $130K to "give" my sibling. At this juncture I decided to just get my own lawyer, because I did not feel the offer was made in good faith, and it seemed as though parent felt that honoring my right of first refusal was "favoring" me over my sibling, and that the offer was intentionally placed where they thought it was out of reach.
Then parent offered the house to sibling for over $200,000 less than the offer made to me. Sibling was unable to qualify for a mortgage, and cannot continue staying here with five people in a two room apartment.
Parent also continued to get angrier based on things my sibling claimed were happening, which were not happening (that I was bothering sibling in various ways). A few weeks ago parent came back and asked me to make an offer, but then left before even letting me do that. My lawyer has said to just wait, and has not responded to messages this week.
Parent then listed the house, and sibling taped an eviction notice to our door this week. That is all just stupid backstory, but the element of parent being unwilling to speak to me is a huge factor here, or I would have made the offer etc. I suspect sibling convinced their new partner that this was their house, and that is the motivation for creating conflict.
Two weeks ago I was referred to a mortgage broker who indicated me and my co-signer qualify for $20K over the higher asking price - but as I updated the broker about the eviction letter, they didn't want to do any more work on it unless I could guarantee parent was willing to sell it to me (which I understand). Theoretically a pre-approval can be for any house, but there may be an element of the income created by this house being part of what a price is contingent on? I'm just guessing. (Co-signer also needs to deal with a negative entry on their report but has a near 800 score per the broker.)
So as of today, me and co-signer have had our credit run once - and I know inquiries don't matter! But I am eager to get this resolved, and just learned sibling has tentative plans to move, which I suspect will make parent amenable to selling the house to me. But I don't know how to go about getting this letter.
As an aside, I'm really frustrated at this being so messy and last-minute, because we easily could have worked out a solution to which everyone was amenable. But this house has tremendous value to me both emotionally (it's me and my dead husband's house) and financially (the apartment replaces his income), so I don't want money from a sale, I just want to buy it.
I do not know where to start or how to get a pre-approval letter, which my lawyer has been waiting on to initiate anything. I understand the initial broker is spooked by my parent's behavior, which looks really aggressive. Knowing this parent, they are a massive people pleaser and terrified of confrontation, hence the horrific communication. This whole situation is just embarrassing and has consumed my year with anxiety and stress.
Sorry for writing all of that, but it's been occupying my thoughts and is part of why I haven't been around lately, and is also the lay of the land. Broker also alluded to an alternative deal structure that "wouldn't even require a mortgage probably," but I have no idea what they meant by that. It appears parent just wants to get money for sibling before the baby, and I have no intention of not contending I have a right of first refusal.
So the major question is "how can I get a pre-approval letter" and the secondary question is "does anyone have any insight or ideas of how to present my buying the house as advantageous to everyone?" I would have prepared for this, but sibling's demand for the house and decision to rush into having a baby with a stranger have caused all this impulsivity on the part of sibling and parent. I don't know anything about mortgages and I just want to resolve this and save Christmas.
It’s a long post but, where do I go from here? I am not sure what to do next. Do I just pay everything off and only charge a small account to one or two cards and pay them off every month or is there more to it? My goal is to buy a house. Hopefully by next summer. I, unfortunately, listened to Credit Karma before I did more research and opened more cards than I probably should have and charged a bunch but, I will have all the balances back at zero in 2-3 months at most.
Here is what I am doing: paying all current credit balances to zero with no more charging, paying down student loans currently in deferment. I am thinking of closing the First Premier card and opening a self lender account (to get a better mix) but, am not sure if closing a paid card will hurt my score.
This is where I am sitting at:
Wells Fargo Fico 9 score: 626
Fico 8 scores pulled from premium Experian subscription:
Experian- 657 Equifax- 643 Transunion: 661 Fico 8: 657
LVNV/Resurgent: $518 paid just waiting to be deleted from credit report
IC Systems: $253, waiting on a response from debt verification letter, if that doesn't work I am asking for a PFD
What Is Reporting
Fingerhut: $73.06 out of $600 limit since Feb 2020
Capital One (authorized user, no card): $555 out of $9,500 limit since Nov 2014
Capital One (Walmart store card): $193.24 out of $300 since May 2020
Credit One $258.50 out of $300 since May 2020
First Premier: 270.83 out of $300 since Jan 2020
Synchrony Bank: $0 out of $1800 since Feb 2020 (never used)
Went through rehab and now in deferment due to being in school, no longer taking out more loans. Total: $39107.18
I also have some transferred closed student loans showing up on Equifax and Transuion as 120 days late with zero balances that I do not know what to do with.
FICO Score Message 1 of 3 0 Kudos Reply
Hello, I am a long time member but I have been away for a long time. I am looking for some advice or just opinions that I am doing the right thing!
To start I am looking to buy a home by the end of the year!
My Current Situation:
AMEX: Opened Feb 2012 / Balance $0 / Limit: $6700 / One 30 Day Late Payment
Barclays: Opened Oct 2019 / Balance $387 / Limit $1000 / No Lates
Capital One: Opened Dec 2010 / Balance $202 / Limit $5750 / One 30 day(Feb 2019), One 60 Day Late (March 2019)
Discover: Opened June 2020 (0% Balance Transfer) / Balance $9343 / Limit $9500
Kohls/CAPONE: Opened Oct 2016 / Balance $0 / Limit $3000
Merrick Bank: Opened June 2011 / Balance $0 / Limit $3300 / 30 Day Lates (Oct & Nov 2018) - 60 Day Late Dec 2018 - 90 Day Late Jan 2019
Nordstrom: Opened Nov 2012 / Balance $0 / Limit $5800 / No Lates
THD/CBNA (Home Depot) Opened June 2011 / Balance $2000 / Limit $6000 / No Lates
CLOSED: PNC Credit Card Opened Jan 2016 / Closed Dec 2018 Legally Paid in full for less than the full balance Lates: (2017) Aug 30days - Sept 60days - Oct 60 days- Nov 90 days (2018) Jul 30 days - Aug 60 Days - Sept 90 Days - Oct/Nov 120 Days
CLOSED: SYNCB/LAZBOY: Opened DEC 2014 Closed Oct 2017 Good history no negatives
CLOSED: NOT REPORTING NOW: Credit Union CC Balance $8500 with late pays (I am sure this will show up when i least expect it)
US BANK Opened April 2020 Good History
- I have 5 closed Auto Loans with perfect history
- Balance $7410 Good History
- Balance $6165 Good History
- CLOSED: Good History
- CLOSED: One Main Financial this loan was paid in full in 3 months!
$9500 - Auto Pay through pay checks does not show on credit report
Now you know my current situation: I just did the balance transfers on the Discover and it has increase my FACO score a large amount. I am thinking of taking a personal loan from my bank to pay off my 401k loan. I would then be able to take out a larger loan to pay off all my revolving debt and have it automatically taken from my pay checks at a 5% interest rate. I would normally leave the balance on the discover card at 0% but that ends in 14 months which I do not know if I would have it paid off in time. As I said i am looking to buy a house before the end of the year. Should i go forward with this process?
Why I am thinking of the 401k loan...
1) I like the idea that I have a very low interest rate and that interest actually goes back into my 401k
2) I know the debt will be paid off in 60 months
3) If god forbid i lose my job the loan is paid off by my 401k (I know this sucks but it does protect me)
4) this will clear up my credit report of debt and maybe increase my credit score more
I have a plan in place to not run up credit cards again. we are living will within our means now and not running up debt but actually slowly paying it off with high interest. It will go even faster with low interest rates! The way I figure I will be saving an average of $400 a month in interest alone!
Please give me your honest opinion on what I should do!
Hi. Thanks everyone for push out of hopelessness. My scores have increased about 30 points each, and this without reflecting that I paid off a $2500 installment loan a week ago. Total paid off is about $7000 in 6 weeks.
· My goal is to buy a home with an FHA loan around October 2021.
· I have $2000 per month to put toward resolving these negatives.
· I don't know if I can call BBVA and Net Credit and work out payment arrangements, or if I need to have all the money now. Scared to call—I keep hearing “don’t talk to them.”
My question is what order to put these in based on how quickly it will impact my credit score.
My options seem to be:
1) Resume student loan payments ASAP, over the next year just save the money monthly and pay BBVA first and then Net Credit, then down payment.
2) Pay BBVA first, resume paying student loans in September and then pay Net Credit over the next 12 months.
Remaining negatives on credit report:
Defaulted Student Loan
· Wait 1-3 months and use that $850/month to work on the other two items?
· $5600 charge-off as of Sept 2019
· Planning to just pay it, assuming I'll have to pay in full but not sure
Net Credit Financial Services
· $6900 charge-off from Sept 2019
· Planning to just pay it, assuming I'll have to pay in full but not sure
When do I apply for the mortgage, by the way? How far ahead of when I want to close?