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From 400 credit score and failed purchase to home ownership!

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Anonymous
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From 400 credit score and failed purchase to home ownership!

My house is closing as I type this so I just wanted to share my story for anyone still in the trenches.

 

I owned a home with my ex-husband back in 2006 and it was foreclosed during our divorce in 2008. Neither of us could afford it on one income, the economy sucked, it was just terrible timing. After the divorce, I had terrible health problems and ended up unable to work in 2012. The next year, I got a large settlement and looked into buying a house, only to discover my credit score was in the 400s. Even with a large down payment, the lender laughed at me. And she wasn't wrong, it was a complete mess. I basically had to wait for a lot of things from the divorce era to fall off before even attempting to buy.

 

Fast forward to 2016 and I was ready. I'd gotten my credit score up to 620 with a lot of work and time. I felt good. But I was only living on disability and child support so my DTI was very tight. Still, things looked good. I was pre-approved, made an offer, etc. Then, in underwriting, my ex-husband stopped paying child support. It wasn't malicious, he lost his job. But needless to say, with only one week until closing, the deal fell through and I had to quickly move as my rental home was already re-rented because I'd given notice. It was completely traumatic, frankly.

 

I was scared to ever try again, but I kept working on my credit. Got my mortgage mid to 680. Found some doctors who helped me get back to work. Got a better paying job. And by late 2018, I thought I might be ready to buy in 2020. Then I found out the neighborhood I wanted to buy in was releasing another tract in 2019 and it was the last one for a long time. I anxiously reached out to a lender in the spring of 2019 and was pre-approved, much to my surprise. My DTI was tight this time because I have 225k in student loans (that were previously discharged for disability but that I took back on by going back to work), but it was workable at the price point I needed. Barely.

 

I then had to wait eight months for the house to be completed. Closing was pushed from late October to late November to the first week of December to today. I was asked to provide the same docs 15 times. I had to provide letters for the silliest stuff. I had to pay off debt I didn't expect to have to pay because it was insanely old. My processor largely ignored me until we got more into the nitty gritty (but my LO was always super responsive). It was stressful and awful, and my previous experience made me terrified, but I got the CTC yesterday, and the closing agent is keeping me posted as the file moves through the closing process today.

 

So hey. Stuff happens. We don't always have the journey to home ownership we'd like. But it's doable if you're willing to wait, get serious about credit, resolve old debt, whatever it takes. Good luck!

Message 1 of 11
10 REPLIES 10
Anonymous
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Re: From 400 credit score and failed purchase to home ownership!

@readyformyhome, yay on your closing!! I know you have been waiting and waiting and waiting. I am extremely happy for you all the way from Kentucky. Smiley Happy 

To add to your story, myself... got divorced in 2015, lost that home to foreclosure during the divorce, my husband and father of our two kids passed away in Jan of 2019.  2019 was a very difficult year , the divorce was not ugly we remainied very close for our childrens sake.  Well due to his illness he was unable to work therefore i did not recieve any child support. My credit went iin the toilet,i could barely make it on my own i was penny pinching at the grocery just to be able to afford a mcdonalds meal for my kids.  I lost two jobs in 2017 and was on unemployment. in April 2018 I found a great job with the University of Louisville hospital, met a wonderful man who loves our kids and was the biggest supporter when it came to the boys dad death ( i truly believe everything happens for a reason ), I was renting an apartment when my sister decided she could no longer afford her house, so my now husband and I moved into my sisters house to pay her mortgage while she rented an apartment and was able toget back on her feet. In sept of this year she tells me she is moving back to her house. I had until Nov 30th to find a new place to live.  Now with a husband, two dogs a cat and 3 teenage kids i was forced to figure out where we would go.  I got in contact with a mortgage company and got pre approved, put a contract on a house, got the inspection to only find out the very next day they wouldn't be able to get the mortgage done without 12k in the bank. On top of the 6k i was putting down. I felt defeated... but i tried one more time with another lender with lighter guidelines. The struggle was very real, the stress was overwhelming as Nov 30 was quickly approaching. After several letters explaining my life, paying off some debt I was able to jump my credit from around 520 to 635 mid within a month and we closed on our home on Nov 30th. Patience, prayer and guidance from the professionals is what helped me get this deal done, and i did it all on my own. I am very proud of how far I have come in the past few years . and to anyone reading this if at first it doesnt' work out, don't give up ,... keep working on your credit and your dreams and don't let anyone tell you you cant do something. Anything is possible with hard work and dedication.

So happy for you @ readyformyhome and Happy Holidays!

Message 2 of 11
Anonymous
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Re: From 400 credit score and failed purchase to home ownership!

You ladies give me so much hope. Congratulations to you both!
Message 3 of 11
Cat27hargadon
New Contributor

Re: From 400 credit score and failed purchase to home ownership!

I too have been in a very similiar situation as you previous ladies - I went thru a divorce, had to file BK 7 years later.  A struggling single mother that received periodic child support. Year 2 post BK discharge, right as I was on the brink of finally achieving my goal of home ownership life happens... My sister went behind my back and had me added as a co-signer on a car that was late 10 times, repo'd 3 times and her than BF wrecked the car with 10K left.. of course she did not have gap insurance, however, she did get the insurance to pay most of it, we negotiated with the bank to pay for less.. In the middle of all of that - I had a an accidant and was thrown from a jet ski at my company's summer party. While waiting for short term disabilty to kick I became late on some CC payments.. As if that wasn't enough, My oldest daughter got her car repo'd that I was of course a co-signer on... the above all happened in 2017.. 2018 I about gave up, was making payments on time, however, I was letting my utilization sky rocket and was getting NSF fees, not that I didnt have the money, I was not paying attention.  2019, I still didnt think I would qualify for a home loan and decided to reach out to see what steps I would have to take to qualify.. the 1st lender I reached out too, basically blew me off.  I reached out to who a co-worker referred me too and color me surprised when he said YOU ARE PRE-APPROVED!!  At time my mid-score was about a 580 and like I said above, not 1 card was under the limit. LO told me what to pay off, how much to pay and said by the time we re-score you, you can be around 620.  I did as advised, however, due to the above, my mid score would not go up much.  We did get it to go above a 600 but barely.  At the time the LO felt we could go FHA and just put the 3.5% down and would be able to use my Child support.. My youngest will be 19 when she graduates, due to how are support is wrote, FHA will not be able to consider it. LO than advised will have to put 5% down.  Now to get the good stuff, the house we put an offer was 300K, with the 40lK advance, we could swing the 3.5%, with the 5% and having to pay off MORE CC''s we could not. I reached out to my bank/CU and was again pre-approved with 3.5% and not having to pay off any more debt.  Our initial closing was supposed to be 12/20, but the sellers needed more time so we have pushed it back to 12/30.  My file is in under-writing and my LO keeps assuring me, based upon everything she see's I should be fine.  It's Christmas time, my youngest daughter's sweet 16 is Sunday, I am just a mess! Sorry for the long post but wanted to share my experience thus far..

Message 4 of 11
Sbrooks1
Valued Contributor

Re: From 400 credit score and failed purchase to home ownership!

Ready, I followed your journey in 2016 and felt such heartbreak for you, and I've followed your current journey with prayers!!!! CONGRATULATIONS TO YOU!!!! I hope you have many happy years in your beautiful new home.

Message 5 of 11
Anonymous
Not applicable

Re: From 400 credit score and failed purchase to home ownership!

Congrats on your new home and what an amazing comeback story!  Thank you for sharing!

Message 6 of 11
Chestnut1
Regular Contributor

Re: From 400 credit score and failed purchase to home ownership!

YOU DID IT. Way to go. What an Inspiring Journey. Tells me to NEVER GIVE UP. Take that extra mile, you never know there might be greener pastures on the other side. Thank you for sharing your story. Motivates a lot of people like me !!. Good Luck and congratulations on your new home. Enjoy your new year sitting and sipping wine IN YOUR HOME. IN Y.O.U.R home. Kudos!!

11/10/18 EX: 540 TU: 525 EQ: 535
10/20/19 EX: 671 TU: 665 EQ: 671
11/07/19 EX: 676 TU: 673 EQ: 676
12/31/19 EX: 669 TU: 679 EQ: 673
01/06/20 EX: 670 TU: 682 EQ: 682
Paid Charge off to $0 in Dec 2019, reported Jan 2020
01/15/20 EX: 666 TU: 655 EQ: 660
02/07/20 EX: 676 TU: 668 EQ: 668
05/08/20 EX: 685 TU: 685 EQ: 682
05/18/20 EX: 690 TU: 685 EQ: 682
03/16/21 EX: 702 TU: 697 EQ: 700
04/20/21 EX: 705 TU: 700 EQ: 702
04/19/22 EX: 716 TU: 705 EQ: 716




Mortgage Middle Score 682 (Old)
Mortgage Middle Score 706 (New)
Message 7 of 11
Anonymous
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Re: From 400 credit score and failed purchase to home ownership!

Omg I remember you sbrooks! It was so traumatic back then. So very glad it had a happier ending this time!
Message 8 of 11
Anonymous
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Re: From 400 credit score and failed purchase to home ownership!

Great story and very motivational, congrats!!!
Message 9 of 11
Anonymous
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Re: From 400 credit score and failed purchase to home ownership!

Thanks for posting this. Very inspiring!

Message 10 of 11
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