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I need some help with this as I want to make sure I am doing things right. We are moving/buying a house in 6-12 months and I want to get things inline.
Background.
1 Back in 2007 I had to declare personal bankruptcy for business reasons.
2 An attempt to rebuild my credit failed when in late 2010 I could not pay a credit card bill that has been charged off. Capital one is not getting back to me with any payment options right now.
The good news is I have had many good mortgages and cards in the past, closed/paid off. I have a 7k car loan from 2 years ago paid off 6 months ago and a new one given to me about 5 months ago for 17k, 100% financing. I have a business lease on my personal credit as well. Zero issues with any of them.
We actually own a house purchased 2 years ago, but with seller financing. Sadly these payments are not on my credit as it is a private mortgage.
We need to move in 6-12 months. I need to understand how the bankruptcy and charge off will effect my ability to get a mortgage. I am aware the good car anbd business payments will help. However, how can I get my provate mortgage payment to be considered for a new mortgage? What else should I expect?
New mortgage would be about 200k with about 60k down. Credit score is about 600 now, but should be about 630-650 after some repairs and getting things removed from my report that I just discovered.
Thank you, I appreciate the help.
Moving to Mortgage forum
The BK should be fine since it was discharged ~7 years ago.
Was the charge-off back in 2010? While having negative items like that after a BK aren't ideal, if the charge-off was back in 2010 (4 years ago) then worst case in my opinion is that an underwriter would require it to be paid. But there is also a good chance that it wouldn't have to be paid either, I'd be prepared for worst case though.
When it comes to your current privately held mortgage, the lender will need to confirm your payment history. They do that by requesting it directly from the lender, and also by getting copies of cancelled checks/bank statements from you showing the payments have been made (since verification from a private lender alone usually isn't sufficient). If you aren't selling your current home prior to closing on the new home, then it's housing payment will be included when determining how much you can qualify for.
Definitely recommend at least a 620 score for your goal, the scores you get here will be a little higher than what a mortgag lender pulls... so I'd aim for at least a 640 score if you are using the scores here as a reference.
So is not too bad and the end result is the new lender should consider my existing private mortgage and "add that" to my credit history/score?
Do you think I am in the ballpark for a traditional lender or am I going to someone that specializes in lower credit scores.
Hello,
As long as you work with a broker they have access to various lenders who do various things. You may not want to limit yourself with a bank. As far as your current scenario, everything seems to be ok for financing.
@Anonymous wrote:So is not too bad and the end result is the new lender should consider my existing private mortgage and "add that" to my credit history/score?
It's not added to your credit or credit score, it's just verified independently.
All FHA lenders specialize in lower scores, as FHA is generally a lower score program.