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Chances of getting a mortgage in a years time..

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Chances of getting a mortgage in a years time..

I went through hell in the last 7 years with my relationship, no excuses though.. So it was just a bad few years. Least to say, I have very bad credit. I will give you guys a quick snapshot...The dates are when they drop off my credit report..

 

Charge Offs

Auto $12,894   02/2024

CC  $589         07/2020

CC  $430         06/2020

LOAN $957      08/2023

CC  $312          09/2020

Auto $18,823    06/2021

CC  $281          07/2020

 

Collections

Verizon  $546    02/2020

Eviction  $7000  03/2025

Eviction  $7400  04/2024

Utility      $250    08/2020

CC          $235    10/2023

 

Pretty brutal eh?

Well in the last year, I have opened up 4 credit cards and paid on time every month for a year. Two were secured and two were unsecured, I just got a credit increase in one to $1000

 

My FICO scores are Experian 622, Equifax 599, Transunion 601. Last year at this time, they were in the low 500's. I want to purchase a home next year and wonder what are my chances? I have evictions and repos that are probably going to kill my chances. I make about $100,000 a year with just 300 Credit card payments, own my car out right, and been saving up since I lived with my new girlfriend. I just need some guidance..I feel that maybe bankruptcy might be my best option? Any help would be helpful, thank you.

Message 1 of 13
12 REPLIES 12
Established Contributor

Re: Chances of getting a mortgage in a years time..

How much do you have saved for retirement?

 

How much do you have saved for down payment?

 

 

__________________________________________________

Licensed NC Mortgage Loan Originator
Message 2 of 13
New Contributor

Re: Chances of getting a mortgage in a years time..

I have 100,000 in my 401k. And I will have 20,000 for DP. I'm also just 35 years old, so I got time to build on the retirement.

Message 3 of 13
Contributor

Re: Chances of getting a mortgage in a years time..

Id pay them all off. Id do pay for deletion
Then start writing goodwill letters.
Message 4 of 13
Community Leader
Super Contributor

Re: Chances of getting a mortgage in a years time..


@avigeant83 wrote:

I went through hell in the last 7 years with my relationship, no excuses though.. So it was just a bad few years. Least to say, I have very bad credit. I will give you guys a quick snapshot...The dates are when they drop off my credit report..

 

Charge Offs

Auto $12,894   02/2024

CC  $589         07/2020

CC  $430         06/2020

LOAN $957      08/2023

CC  $312          09/2020

Auto $18,823    06/2021

CC  $281          07/2020

 

Collections

Verizon  $546    02/2020

Eviction  $7000  03/2025

Eviction  $7400  04/2024

Utility      $250    08/2020

CC          $235    10/2023

 

Pretty brutal eh?

Well in the last year, I have opened up 4 credit cards and paid on time every month for a year. Two were secured and two were unsecured, I just got a credit increase in one to $1000

 

My FICO scores are Experian 622, Equifax 599, Transunion 601. Last year at this time, they were in the low 500's. I want to purchase a home next year and wonder what are my chances? I have evictions and repos that are probably going to kill my chances. I make about $100,000 a year with just 300 Credit card payments, own my car out right, and been saving up since I lived with my new girlfriend. I just need some guidance..I feel that maybe bankruptcy might be my best option? Any help would be helpful, thank you.


IMHO, if I made a salary of $100K, I would pay these off. I was always told that you can't save money if you owe money. So, looking at it from that standpoint and the point that you want to purchase a home, it's time to clean up the credit. Here are my suggestions:

 

Chargeoffs:

Auto $12,894   02/2024 Work on Paying off or negotiate a payment for delete

CC  $589         07/2020 Pay off immediately

CC  $430         06/2020 Pay off immediately

LOAN $957      08/2023 Pay off immediately

CC  $312          09/2020 Pay off immediately

Auto $18,823    06/2021 Work on Paying off or negotiate a payment for delete

CC  $281          07/2020 Pay off immediately

 

Collections

Verizon  $546    02/2020 Pay off immediately

Eviction  $7000  03/2025 Request repayment plan or negotiate a payment for delete

Eviction  $7400  04/2024 Request repayment plan or negotiate a payment for delete

Utility      $250    08/2020 Pay off immediately

CC          $235    10/2023 Pay off immediately

 

Now granted, some lenders don't worry about collections, but my concern is that you have so many that it shows a pattern of not paying bills. I think the evictions may present a real problem because lenders do want to see rent history. It gives them an idea whether you'll pay your mortgage. If it were me, I would call the landlord(s) and ask to set up a repayment plan. Also, do you have any judgments or liens, whether on your credit reports or not?

 

Now I'm not an expert--no way, no how--but just offering advice on what I would do if I were in your shoes and wanted to purchase a home.

 

I'm sure others will come along with maybe/hopefully more positive advice than mine.

 

GL2U

REVISED GOAL: Garden ‘til Dec 2020 — 0 inquiries

Previous Goal: Garden til APR 2020 (extended) and
800 Club (accomplished)


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799
DEC 2017: EX 775, TU 778, EQ 769

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Message 5 of 13
New Contributor

Re: Chances of getting a mortgage in a years time..

 

So if I make a payment plan and actively paying them off, a lender would be more willing to work with me? Also, doesn't this reset the age of the debt? I'm afraid of paying everything off and everything becoming current, then my credit score will plummet. It's a catch 22 it seems. The system is flawed IMO.

Message 6 of 13
Established Contributor

Re: Chances of getting a mortgage in a years time..


@avigeant83 wrote:

 

So if I make a payment plan and actively paying them off, a lender would be more willing to work with me? Also, doesn't this reset the age of the debt? I'm afraid of paying everything off and everything becoming current, then my credit score will plummet. It's a catch 22 it seems. The system is flawed IMO.


Bite the bullet and pay the piper......pay off all the little rinky dink collections and derogatory accounts. 

 

The auto loans / creditors are likely to accept or negotiate with you some kind of payment plans.  Do this ASAP if you can.  

 

The evictions--likely have all kinds of "fluff" charges built into them that you might be able to negotiate away if you were able to make a lump sum payment on them--you might be able to negotiate and settle those quickly--otherwise, if they aren't willing, set up some type of steady payment plan (or save until you have the lump sum--a 401k loan might do the trick as well) and get started.

 

Obviously, you need to save your payment records and be prepared for each and every creditor to not report your payment to them so you'll have to police them yourself.

 

Now, more importantly, what type of credit accounts do you currently have open and active?   You do realize you need 2-3 accounts open and actively reporting your on time payments in order to boost your score?     It seems we haven't mentioned this yet, but that's the "catch 22" portion right there......the only way to boost your score is to replace your delinquent and derogatory data with positive data and distance.   

 

Fast forward to a year from now and you'll be good to go as long as you stay on track.

__________________________________________________

Licensed NC Mortgage Loan Originator
Message 7 of 13
New Contributor

Re: Chances of getting a mortgage in a years time..

I have 4 open credit cards at the moment with good payments for the last 10 months. I got secured credit cards and one of them was unsecured. I even got a credit increase on two of them just recently. So I've been showing a healthy track record of making payments. My score was in the high 400's to low 500's this time last year and I'm hovering around 600 just based on those credit cards. So if im making a payment plan on a few of the repos/evictions, I'll be elgible for a mortgage or would they need to be paid in full? That's a lot of cash to fork over in a years time but I'm more than willing to start making payments on them. I did call a few of them to do pay for delete and none of them said they're allowed to do that. I have a lot of charge offs that are going to expire in 2020, around the same time I plan on purchasing a home. I feel that I should just let them die off and focus on the newer ones. Thoughts?

Message 8 of 13
Community Leader
Super Contributor

Re: Chances of getting a mortgage in a years time..


@NC_Mtg_Loaner wrote:

@avigeant83 wrote:

 

So if I make a payment plan and actively paying them off, a lender would be more willing to work with me? Also, doesn't this reset the age of the debt? I'm afraid of paying everything off and everything becoming current, then my credit score will plummet. It's a catch 22 it seems. The system is flawed IMO.


Bite the bullet and pay the piper......pay off all the little rinky dink collections and derogatory accounts. 

 

The auto loans / creditors are likely to accept or negotiate with you some kind of payment plans.  Do this ASAP if you can.  

 

The evictions--likely have all kinds of "fluff" charges built into them that you might be able to negotiate away if you were able to make a lump sum payment on them--you might be able to negotiate and settle those quickly--otherwise, if they aren't willing, set up some type of steady payment plan (or save until you have the lump sum--a 401k loan might do the trick as well) and get started.

 

Obviously, you need to save your payment records and be prepared for each and every creditor to not report your payment to them so you'll have to police them yourself.

 

Now, more importantly, what type of credit accounts do you currently have open and active?   You do realize you need 2-3 accounts open and actively reporting your on time payments in order to boost your score?     It seems we haven't mentioned this yet, but that's the "catch 22" portion right there......the only way to boost your score is to replace your delinquent and derogatory data with positive data and distance.   

 

Fast forward to a year from now and you'll be good to go as long as you stay on track.


+100

REVISED GOAL: Garden ‘til Dec 2020 — 0 inquiries

Previous Goal: Garden til APR 2020 (extended) and
800 Club (accomplished)


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799
DEC 2017: EX 775, TU 778, EQ 769

|| NFCU CashRewards $30K || AmX Cash Magnet $30K || Discover IT $22.2K || Macy's $20K || NFCU CLOC $15K || NFCU Platinum $12.5K || AmX ED $11.5K || CitiCostco $7K || CitiDC $6.3K ||
Message 9 of 13
Community Leader
Super Contributor

Re: Chances of getting a mortgage in a years time..


@avigeant83 wrote:

 

So if I make a payment plan and actively paying them off, a lender would be more willing to work with me? Also, doesn't this reset the age of the debt? I'm afraid of paying everything off and everything becoming current, then my credit score will plummet. It's a catch 22 it seems. The system is flawed IMO.


The system is not flawed. Creditors just want their money. 

 

Now, If the small balance are paid off, there’s no clock to reset. And the larger balances don’t fall off until between 2024-2025. Honestly, that’s like forever!

 

So, I guess the question you have to ask yourself is do you really want to wait 5-6 years to buy a house. And, if you do, that’s ok too. 

 

But, keep in mind that these creditors could file judgments for nonpayment between now and 2025. IMHO, getting out in front of this is the best route and especially since you want to buy a house.

 

I re-read your first post and you had mentioned filing BK. I think because you make a reasonable salary, more than likely you would be advised to file Chapter 13, which is a 3-5 year repayment plan. And a BK remains on your credit reports for 7 years. 

 

So it’s a lot to think about. One suggestion that NC_mtg made was to take out a loan from your 401K which is not a bad idea because you would be paying yourself back and at a lower interest rate. 

 

Yep, a lot of stuff to consider. 

 

GL2U

REVISED GOAL: Garden ‘til Dec 2020 — 0 inquiries

Previous Goal: Garden til APR 2020 (extended) and
800 Club (accomplished)


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799
DEC 2017: EX 775, TU 778, EQ 769

|| NFCU CashRewards $30K || AmX Cash Magnet $30K || Discover IT $22.2K || Macy's $20K || NFCU CLOC $15K || NFCU Platinum $12.5K || AmX ED $11.5K || CitiCostco $7K || CitiDC $6.3K ||
Message 10 of 13
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