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Can I Qualify for a Mortgage?

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JeffWeico
Valued Member

Can I Qualify for a Mortgage?

Hi,

I appreciate any and all answers here...

About 7 years ago, I was living at home, making minimal money and was still responsible about credit. However, my father (now deceased) opened a couple of credit card accounts in my name and defaulted on them. I was reluctant to do anything about it back then, as I had no idea how the system worked, and felt responsible for the debts. I partially paid these, but not 100%, more like 40%.

In the meantime, I had 2 judgments associated with me, although they were definitely not mine. Trans-Union and Equifax agreed to remove them, as they determined that these were NOT MINE. Experian refuses to even investigate my disputes. Each time I send a dispute, they send me a letter claiming they received the dispute, but they do not believe that it was coming from me, so that to PROTECT ME, they refuse to investigate. GGGRRRR!!!! I have no idea how Experian thinks that a mystery person is disputing inaccurate information on MY credit report. If this keeps me from getting credit I WILL SUE!

This all happened in 2000-2001. I now have an $85k per year job, and have been paying cash for the last five years for everything. The one exception to this was for bills incurred as the result of an EIGHT WEEK HOSPITAL STAY. I had an infection that was very bad (MRSA) and listened to the advice to stay even though I felt OK. I have Blue Cross, and was responsible for only $2k in deductibles. I paid that, but was overwhelmed with invoices, bills and "billing notifications" that advised I should not pay the charge as it was submitted to my insurance company.

Most of those were easily taken care of, but there are a couple of collection accounts lingering. Specifically, 4 accounts for under $1k.

By not using credit, I have not done myself any favors.

In any event, my FICO scores are EXP-566 EFX-588 and nothing available on TU.

I saw a house I liked in Lake Station, Indiana (40 minutes from Chicago) for $69,900.
This is cheap, but I just LOVE the AREA!

In my favor, I have...

1) $54,000 in my 401k
2) $5,000 in my brokerage account
3) $3,000 in my savings account
4) $2,200 in checking, although that will go out for bills
5) I have a 20% down-payment available in addition to the above.

The resulting mortgage at 6.25% wold be $350 or so per month, which is HALF of what I currently pay for rent.

I would be trying to get a 15 or 30 year fixed rate mortgage.

Would I qualify???

Any thoughts appreciated!

Thanks,

Jeff
Message 1 of 7
6 REPLIES 6
Anonymous
Not applicable

Re: Can I Qualify for a Mortgage?

I am no expert...but I think you could definitely qualify, although your interest rate will be higher due to the poor credit. You need to tell us though what your total debts are per month.....your DTI would play a big factor here since your credit would not be good.

Message Edited by firstinlastout on 02-13-2008 09:01 AM
Message 2 of 7
JeffWeico
Valued Member

Re: Can I Qualify for a Mortgage?

With the exception of my rent, electric, phone and cable, I have no debt. I DID open a secured CC with Bank of America, with a $1k limit and a zero balance.

My car is older, but it still looks decent, it runs fine, and best of all, it is paid for!

I would not mind too much paying a higher interest rate, as I understand that you can refinance after having 24 months of on-time payments.

It's just that with the horror stories you hear about banks losing billions of dollars, and the credit markets being tight, I might be one of those people who is shut out. If I am, so be it, my credit should start looking much better in the next 6-12 months anyway.

I have also learned that there is always another deal. The worls is full of deals, and it always will be.

One guy I work with commented that right now, Donald Trump couldn't get a mortgage, but he probably does not know what he is talking about.
Message 3 of 7
Anonymous
Not applicable

Re: Can I Qualify for a Mortgage?

Jeff...yes, you could easily qualify and you can find out in less than 10 minutes by going to www.quickenloans.com. They have excellent programs, some requiring no money down. I got pre-approved with a 30 year fixed but the first 10 years is interest free ! Good luck.. N
Message 4 of 7
ShanetheMortgageMan
Super Contributor

Re: Can I Qualify for a Mortgage?

Bad news is that the judgments will definitely need to be taken care of before you can obtain a mortgage, unless you want to pay the judgments off in order to obtain a mortgage... which if they aren't yours, I don't see why you would want to pay them.  Not sure why Experian is being so stubborn, have you spoken to them over the phone or just through mailed correspondance?  If you haven't spoken to them over the phone, I strongly advise you to do so.. and speak to a supervisor if needed, them not investigating a judgment you said is not yours is absolutely ludicrous.  You could also try contacting the court the judgment was awarded by and investigating that way.
 
Good news is that once you take care of the judgment you look to be in very good shape to qualify.  The fact that you have a very good debt to income ratio, tons of savings, and can put money down, will definitely override the fact that your scores are lacklusted... and because of those collections on your credit report are medical related, those will likely not have to be paid either.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 5 of 7
JeffWeico
Valued Member

Re: Can I Qualify for a Mortgage?

Shane,

Thanks for the advice.

I have actually PAID the medical collection accounts as they WERE mine, and it was not my intent to skip out on these bills. It was just confusion on my part, plain and simple.

As for Experian, I asked an attorney I work with for advice and she is going to have the documents pulled from the alleged lawsuit against me. She advised that hopefully, there will be some sort of identifying information in the suit (SSN, DOB, WHATEVER) that I can use to prove beyond the shadow of a doubt that a mistake has been made. She told me if that information exists, we can get it removed very quickly.

She also advised that I have grounds to sue Experian for not investigating my dispute, but that we want to use that only as a last option.

Of course, the last piece of advice was to wait to apply for a mortgage until this is resolved.

I'm fine with that.


Thanks again!

Jeff
Message 6 of 7
ShanetheMortgageMan
Super Contributor

Re: Can I Qualify for a Mortgage?

You are welcome, sounds like you have a great friend who is looking out for your interests as well.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 7 of 7
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