Almost out of time!

[Anonymous]

In July, under the advice of my mortgage lender I agreed to buy out my contract for deed.  The end of August, I signed a 60 day to secure financing and 90 days to close because the lender said we could do it.  I knew my credit score was low (575 FICO 8-mortgage score lower) but he insisted we could get it done.  I originally had a 5 year contract with fantastic terms which would have cut my buy out to about 50% of the purchase price and was happy with it.  The holder of the contract started being a pain which is why I considered.  During the 90 day option, I offered to continue paying the monthly payment but he wanted me to put it towards other debts and closing the loan so I paid off a bunch of ccs and collections with it.  My score has not gone anywhere.  I am now at the point where it looks like I won't be able to close and don't have the money to catch up on the last 3 months of payments.  First it was the score than when that got higher and we could manually underwrite, my student loan calculation hit my debt ratio.  I have $141,000 so $1400/month.  I'm trying to get everything worked out but have less than a month now to close.  Any advice?  With pets it will be next to impossible to move and then I'm also out the $15,000 down payment!

[homeloanexpert]

Unfortunately you were given really BAD advice. I never tell any of my clients to pay off charge off or collection unless it is a recent collection within the last 12 months or you know that you can get a pay to delete. That said, if your scores are below 580 most likely the best you will get is a 90% LTV.  Also, unless you can get a letter from the seller or make it part of the contract (alleviating you of the responsibility of paying your last 3 months during this option period) you will have a difficult time getting your loan approved with regards to your VOR (verification of rent). As a manually underwritten loan, you will be required to have a VOR. That rule doens't apply if a borrower is living with their parents rent free.