Need some help

Anonymous · ‎10-06-2008

I am new to this forum, so my questions may seem silly to everyone, but I have no one else that I feel comfortable asking. My husband I recently sold our house and relocated. While we would like to build, if anything we like is for sale, we will consider buying. We looked at a house last night that we really like, but I have a not so hot credit score. While it is improving, it is still troublesome. My credit scores are 556, 552, and 603. We were not prepared to have a baby. We had not saved enough and got WAY behind on some payments. We settled with a credit card company for less than what we owed. We also settled with a debt collector fora medical bill for 50% of what was owed. We are not behind on any payments now. My husband's scores are 666, 654, and 717. Our current combined income is 98, 000. Should we even try to borrow, or are things just too bad? Can we borrow with my husband as the primary borrower? His income is 34, 000. Any help would be appreciated!

Lel · ‎10-06-2008

@Anonymous wrote:
I am new to this forum, so my questions may seem silly to everyone, but I have no one else that I feel comfortable asking. My husband I recently sold our house and relocated. While we would like to build, if anything we like is for sale, we will consider buying. We looked at a house last night that we really like, but I have a not so hot credit score. While it is improving, it is still troublesome. My credit scores are 556, 552, and 603. We were not prepared to have a baby. We had not saved enough and got WAY behind on some payments. We settled with a credit card company for less than what we owed. We also settled with a debt collector fora medical bill for 50% of what was owed. We are not behind on any payments now. My husband's scores are 666, 654, and 717. Our current combined income is 98, 000. Should we even try to borrow, or are things just too bad? Can we borrow with my husband as the primary borrower? His income is 34, 000. Any help would be appreciated!

How much is the house that you want to buy? It's going to be tough to qualify on his income alone if you live in a higher priced area.

Do you have money for a down payment of at least 3% of the purchase price?

Have you and your husband sat down and worked out a budget to see how the purchase of the home will affect your finances? You don't want to get into debt again, especially during this time when housing prices are suffering in much of the nation.

Anonymous · ‎10-06-2008

Yes, we have sat down and worked out a budget. When we had problems before, my husband was working part time and was still in college. Our highest offer for the house is going to be 145, 000. We can afford at least a 10% down payment.

JuliaTN · ‎10-06-2008

With $14,500 to put down it wouldn't hurt to try. Talk to a few mortgage brokers/bankers in your area and don't forget to ask specifically about first time homebuyer incentives (they vary from city to city and state to state) if you haven't held title to a house in the last 3 years. Depending on what other debt you have, it might be possible to qualify on your husband's income alone.

Lel · ‎10-06-2008

@Anonymous wrote:
Yes, we have sat down and worked out a budget. When we had problems before, my husband was working part time and was still in college. Our highest offer for the house is going to be 145, 000. We can afford at least a 10% down payment.

Well, with your combined incomes, the payments should not be a problem. And with that price and downpayment, then your husband might qualify on his own, but it's going to be close according to my back-of-the-envelope calculations. You'd need to figure out what the annual property insurance, property taxes, and PMI (if applicable) might be. If there is any additional debt in his name (e.g. credit card, student loan), that will affect his debt-to-income calculation.

It seems that he is close enough that it would be worth your while to put your information in front of a loan officer to see what the possibilities might be.

At the same time, waiting and working on your credit scores and building up savings wouldn't be a bad thing either.

Junejer · ‎10-06-2008

Lauren, are there any CCs that you can pay down the util to 9% or less to receive a bump in your scores? With your combined income, you should no problem qualify for a mortgage, based off of income. However, your scores need to come up. The quickest way that I know to do that is to pay your util down to 9% or less, both individually (each card) and overall (all cards combined).