I have a middle score of 637, and my boyfriend has a 577, both with credit cards with high balances so I am sure they will go up a small if we pay them off. He has some collections from a few years ago, one from an apt. I make around 26k a year and he makes about45k a year. He is in the business of building homes and he runs a store that sells the materials needed so he has excellent friends that would erect us a home and give us lots of equity. We are looking to get around 150 to 170k to erect. Do you reckon it is possible, or do you know of any loans that would work?
Yes he has collections owed, and we havent always made this much money. We went here for his job, and he doesnt in fact do the construction. He runs a store similar to home depot and has job security like no other (he will never lose his job.) The credit card debt will be paid off probably this month or next month, thats why I said our scores would probably go up. Thanks for all the answers
you should have no problem at all!
Yes, but you need to find a excellent mortgage broker who you can trust, so he can get you the best deal.
You shouldn’t have a problem. But certainly pay those credit cards down to not more than 50% of the balance limit. Then wait a month or so and contact a mortgage broker and get pre-approved.
If you are looking for a construction loan, it will be more hard to get approved, especially with your boyfriend’s score. You will also be expected to come up with at least a 10% down payment.
Buy loans work differently. They are simpler to qualify for and there are many lenders that will not require a down payment with your credit scores.
Best of luck!
Thats a pretty excellent score. And wow, you guys barely make enough…poor you
whatever you do,
do one thing for sure……..
Get a locked in rate.
do not get an ARM in a rising interest rate climate.
that would be a major mistake.
You make over 70K a year, why do you still have credit card debt?? Clean up your mess first, then check out
They will do a manual underwriting (no credit score needed) based on income, employment, debt ratio and payment history. I had a rotten credit score two years but they gave me a loan @ 6.25%.
First go to a bank and see how much they will loan you on a home. They will give you all the info on the score that you will need to secure a loan. They usually require you pay off any debt that is still outstanding on your credit. You both have a excellent score but sometime even with a score like this they want more down to get the loan
If you make that much… why do you have high credit card balances?
Appears as if you are already spending more than you make.
Oh yeah, the bank will want a down payment on loan.. minnimum 10 percent.
He has collections he still owes?…
In Construction… not a steady job construction is….construction can be seasonal(lapses in income)
It is excellent to have friends, but will they pay your bills?
almsot anyone can find a lender if you don’t mind paying high enough interest rates.
Your score is excellent enough for 100% financing. The problem is that your boyfriend makes more money, and therefore will be primary on the loan, and he just misses (580 being a pretty universal minimum). If you have a down payment of 5 to 10 percent, or can get your seller to carry some back (very possible in this market) you should be able to get enough of a loan as long as you keep it to what you can provable meet the deprivation of. On the other hand, if you can improve his score a few points, you’ll qualify for a better loan, and the further you improve both of your scores, the better the loan you qualify for. It is not hard to improve credit scores into the 660 to 680 range.
Yep, you’ll qualify but you will have a high interest rate.
I must say few equipment first in this scenario. Not being married can cause some hard problems,as I have seen in the past. Not a problem with me personally but being in this business as long as I have I have seen some fascinating problems that developed over unmarried indivduals purchasing a house together.
The next thing, do you want a construction loan so your boyfried can erect a house? This is what I surmised from your question.
If that is the case, you are in for a bit more hard situation than just trying to get a loan. If you want to erect a house most lenders will want to see that you own the land already. After you own the land then you apply for a loan to erect your house.
Now in answer to your question, if you wanted to buy a home not erect a home, but buy a home your boyfriend don’t have the very best score in the world but yes he could buy a home.
The reason I said your boyfriend is because he makes the most money and in that he would be the primary borrower. You can and should go on the mortgage as a co-borrower.
Now the $150,000 to $170,000 is that the value of the house once you have completed the building or is that what you want to pay to erect your house.
There is a fantastic difference.
#1 if you erect a house worth $150,000 to $170,000 then it would cost approximaely $80,000 to $90,000 to erect.
#2 If you erect a house that cost $150,000 to $170,000 then after completion of building your house the value would be approximately $320,000.
Since your boyfriend is in he business of building houses, force I suggest that you and he find a fixer upper in your area that you can buy not more than value, let him work and fix it up on the weekends or when he has free time. After about 2 years sell it for a profit and do the same thing over.
You will be establishing credit with the mortgages you will be paying and after about 2-3 houses you will have better credit and perhaps could qualify for a 100% loan.
If you want to do the loan bit and buy your home or erect your home, find a mortgage “broker” that deals in construction loans, take 2 yrs of W2 and taxes for the both of you, a month of pay stubs, 6 months of bank statements and statements from any 401k and pofit sharing from your jobs. Once the mortgage broker has these documents he will get a cr edt report for the both of you. Once he has done that he can now tell you if you are qualified for a 100% loan, if not the amount you will have to bring to the table.
He should also be able to get you a permanent loan after the construction loan. Most lenders now do one loan for everything, but, you should make sure that you have a construction loan as well as a permanent loan.
I hope this has been of some use to you, good luck.
“FIGHT ON”
pay the collections before you apply–that’s a red flag for any mortgage lender, also keep proof of payment for those payoffs, then wait a month or so for the payoffs to record on his score
after that, you’ll get a lower rate and not worry about getting approved…until collections are paid in full, you may not get approved
No way JOSE sorry to say. You need private money. Place together a business plot and submit it to a hard money bank. If you can show them your plot and the equity they may loan you the money to erect and then give you a high rate until you qualify for a better loan. PS its not just your credit but debt ratio and cash on hand.
Yes, you can qualify with the score, but as for your boyfriend it force be harder. It can be done, but the rate force be high.
I live in Washington State and I am a Mortgage Broker. Most banks will not give a loan to someone when their credit score is under 580; I work with over 140 lenders.
When was the last time that you ran both your credit? Remember that lenders will use your credit score for 60-90 days, mostly 60 days.
Don’t run your credit too much; every time you apply for credit or have someone do a credit check, it will bring your score down. When you find a excellent Broker, let them know when the credit was ran last.
Most lenders that I work with do not care about ancient collections, depending if it had to do with a foreclosure. There are lenders that will use the best credit score and the best income between the two of you. I have lenders that will also do construction loans up to 95%.
If you would like more info please email me at, and I will email you back all the info that you need.
Very vital!!! Don’t pay your collections…. until you run a credit analyzer report. Been in the business and I’ve seen it too often when people pay ancient collections and it in fact hurts there scores. The most significant factor on your credit score, history wise, is the last 24 months. Ancient collections that have a last activity date older than 24 monthsare not hurting your score that much. When you pay one of these ancient accounts, it then reports as a paid collection(unenthusiastic) but it updates the last active date to the month you paid it. That then makes it a recent paid collection, which will cause your score to go down. People misunderstand this factor. The credit limit to balance ratio is very vital, pay down account but don’t close them. Again, the analyzer will tell you what the optimal number is. Now on the loan, for a home that is already built, 580 is usually the number but try not to go subprime if possible. If you have 2 yrs of employment with w-2′s yo ucan get a Fannie Mae Flex loan. It has a 4 level approval logic and the rates are much better tha a subprime loan. The PMI may be high, but once you improve you scores a bit more you can then take out a 2nd mtg to get rid or just refi it, Fannie has no prepay penalties like the subprime loans. Also, they have a My Community / Neighborhood Advantage program based on the location your purchasing, you should certainly see if your area is in that program. On that program you may get a leve 2 approval but you’ll get the top level rate. Also, the normaly PMI is significantly reduced.
If you’re looking for a construction loan, it’s more complicated. Some lenders base the amount they loan base on the project cost some base on the future value of the home once it’s complete which may enable you to place down no money at all. You can finance the land buy and the construction costs. Regardless, for the construction loan you’ll need a higer credit score certainly over 600 and the closing costs are usually higer. I can point you in the right direction if you give me a small more info. But on the credit side, get someone to run the analyzer for you (you can get one for free) and tell you exactly what to do to improve your scores. Most don’t know this but you can pay collections at closing instead of before applying if the analyzer shows that it will hurt your credit in the near term. Also, most subprime lenders don’t care about collections older than 2 yrs, some 1 yr. On the application you can have the collections marked to be paid at closing.-
Lender will give you money for sure. Probably charge you a higher interests rate and extra insurance on the loan for not having excellent credit.
Would you consider delaying your plot? Professional investors are careful in choosing each investment that would be near or immediately cash flow positive. With overpriced housing market, that is not possbile.
For example, it costs $500,000 to $550,000 to buy a two bedroom units in Sunnyvale California. Mortgage monthly payment with nothing down is $3500 to $4000 a month with 7% APR. The rent one can collect from such unit would be $2000 a month. Therefore, for each unit you buy, you would lose $1500 a month.
* We assume tax benefits would cancel out with tax and maintenance fee. Please consult your CPA.
**If you have large down payement, the rate may be lowered.
Another vital factor to consider, home price may not appreciate as much any longer. In most area of the U.S., housing price stopped going up as inventory continues to erect up. It is normal to see a correction as a boom that lasted for numerous years.
If you are investing new money in to real estate, this may not be a excellent time as the potential return on investment is tiny compare to the high risk of lower home price.
If you are doing a side way go, meaning you are selling one to buy another one, then it is acceptable.
Nothing is absolute, but housing market is very likely undergoing a correction and this is only the beginning. Some say this would be a soft landing (0 to 10%). Some say a big crashing is coming (10 to 20%).
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Hello –
I note that you said you are looking for a loan to erect. This means you would then be looking for either a pre-construction loan and or lot loan.
The pre-construction loan would require that you break ground on your new home with the first 12 months.
It would also require that you have your building plans set. In reagrds to your yearly earnings, have they been consistent for the last 24 months?
The reason I question, is that they will take what you made an mean it over 24 months. If not, we can still get you a loan, but the rate would be higher.
Studies show that most Americans would rather see their dentist than have an appointment with a mortgage loan officer. The likely reason is that they are frightened of rejection – frightened of the huge terrible loan officer who will stamp a huge red NO on their application. This is far from reality. Remember, Commissioned Mortgage Originators are in the business of saying YES. We’ve heard it all and seen it all and we are willing to help you, no matter what your situation is.
- Credit Problems are OK – You force be baffled about how a lender determines if your credit is excellent enough to qualify for a mortgage loan. Let’s clear up that mix-up right now. Basically, if you’ve had credit problems in the past, the mortgage company will look at those problems and question 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 force 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 excellent is the probability that you will pay your bills faithfully every month from now on?
- Judgments – If you have a judgment against you that has not been satisfied, you will not be able to obtain a mortgage loan. To obtain a mortgage loan, the mortgage company will require title insurance. Title insurance cannot be applied against your loan if you have an outstanding judgment.
- FICO Score – Although lenders look at much more than just your 3 digit FICO (credit) score, you should try to keep your credit as clean as possible, because the higher the score, the better!
- No Credit History – Even if you don’t have any credit history whatsoever, you can qualify for a mortgage loan. As a matter of fact, it’s not all that hard. If you have a stable income, proof of employment, and a tiny down payment, you too can qualify for a mortgage loan!
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From experience:
I advise people to not buy a home with someone they are not married to. What happens when the relationship is over? No spousal rights here kiddo. Not excellent for either of you.
You reckon you have troubles now, wait until you do buy together and then split. You really should reconsider.
If he has terrible debt from a few years back an has failed to reconcile it, he has set a pattern that will go for a long time. You really need to reckon long and hard.