About 4 years ago, I was working and making a good living, my base pay was $84k and I usually earned a bonus as well. At that time, my credit was excellent.
Three years ago, I moved and bought a house under a land contract. I didn't set out to find a house that could be bought that way, it just happened.
I purchased the home for $46,500 putting $5,000 down. At present I owe approximately $25,000 on the balance. My payments are $570 per month.
After this happened, I was hit by a medical issue (dermatomyositis) and had to go on disability. It is not an easy process and it took some time, during which I had no income. As anyone can understand, savings only go so far, and get depleted quickly when you have no other income. During that time, my creidt went downhill. I couldn't pay a credit card bill that was about $5,000. It was sold to a debt buyer who wants almost $20,000 because they added interest and late fees for every month it was unpaid. I refused to pay it. At some point in time, a debt has to be written off - at least in my opinion. I'm not objecting to the original debt, but to the $15k in extras they tacked on.
I have never been late with a house payment and my utilities and other bills are mostly paid on time. My current income is $1,700 per month.
My problem is, there will be a balloon payment of $18,000 due in 18 months. My two choices are to pay $1500 per month on the land contract so that there is a zero balance due when it expires, or to refinance the property.
A realtor told me that my house is worth about $60,000 and thay if I sold, I could get maybe $55,000 - $58,000 for it. So, I have more than 50% equity in the property.
I would love to be able to refinance the balance owed on my land contract and have more manageable payments. I'm not looking for a 30 year mortgage, just something that is long enough so that I don't have to make monster payments each month. As I see it, the fact that I have equite works in my favor, but it is really the ONLY thing working in my favor. My FICO has to be pretty low at this point. Also, the balance is small for a mortgage and I'm not sure if lenders will even be interested in originating such as loan.
Does anyone know if there are any special programs I would qualify for? Should I be looking for a mortgage, or would this fall under the category of a personal loan? Are loans available to people in my circumstances? I know that before the meltdown, mortgages were available to just about anyone, but now I fear the pendulum has swung in the other direction.
Any advice would be appreciated.
