Heir to a home w/30k in payments behind, foreclosure was stalled due to covid forebearance

[redirectionkid]

• payoff is $92k
• zestimate is $238-250k
• decedent owed $30k in payments, all due (afaik) when forebearance expires at end of this month
• I am the heir and also the executor, although no will was left

I've never purchased a home before

I have about $16k in debt, $10k from student loans, $6k is a collection from walking away from a truck leasing program that I feel in retrospect to have been a total scam.  I refused to pay it, and was planning to let it slide off in 2023.  I've been literally a cockroach credit-wise my entire adult life, with numerous collections here and there, most of which I decided to pay off last year to clean up my credit.  It went from high 400's to lower 600's in the last 12 months.

My plan is to refinance the home through my credit union and pay off the original lender to prevent the foreclosure, but the home needs to be gutted inside due to the nature of how long the decedent was in the home before discovered by authorities.  It was a foul situation to say the least and very mentally/emotionally challenging.  My income is $84k+ bonuses, but because I've had to take time off to handle the executorship duties, my last couple of paychecks will not reflect this and I'm worried about this.

I've communicated with current mortgage lender, and am awaiting their response to verify my successorship, but I've also spoken to my credit union rep, who said he couldn't really do anything about refinancing the home until I assume the mortgage from the original lender.

Is this a good idea?  What can I do to make myself look better for refinancing?  Do you think I can get some money back to help with the expenses of demolishing the interior and remodeling it?  I make a decent amount, but have never really been good at saving anything.  Do I have a chance?  The credit union rep seemed to think it would be an easy deal, but he hasn't seen my credit history yet.  Should I give up and just let it go to foreclosure?  I am currently homeless (a semi-truck driver) and having a house would mean a lot to me but I'm not sure what to expect here.  Is low 600's gonna work?

[ShanetheMortgageMan]

It's certainly possible to accomplish what you are setting out to do with scores in the low 600's.  FHA would be a more obvious choice, but if the score is above 620 then conventional financing should be an option as well.  

Do I qualify for a mortgage? Info that is needed lays out the information needed to determine your chances of approval, but in general if you've had clean credit (no new derogatory marks on credit) within the past 12 months then you'll have a decent shot at qualifying for an FHA mortgage, assuming your debt to income ratio works out.  You should be able to get cash out of the equity (called a "cash out refinance") in order to fix up the home as well, typically you can take cash out up to 80% of the home's value (so using a $238k value that'd be a new loan amount of $190,400).

As far as taking a month or so off work, that shouldn't be a big deal but it may reduce the amount of income that a lender gives you to qualify with.  Your income and amount of debt you have doesn't indicate to me that a month or so off of work would reduce your income enough to where you'd no longer qualify though, so I wouldn't be too concerned about it right now.  The lender will likely want you back working before you close though.

[compassion101]

I think the first question for you is whether you want to live in this home. Have you already decided that? If not, there's plenty of equity you can sell it and pay off the debtors and walk away with a nice down payment for the house you want.

[EquityinScoresNow22]

@redirectionkid I agree with @compassion101 , one of your first decisions is "do I want to live in this house?" As a truck driver, it may be that you are moving around from state to state. You didn't provide that info. But, bottomline is you do have options. @ShanetheMortgageMan gave you very good advice. Once you take legal possession of the home, you can proceed with figuring out your path. If you decide this is the house you want to live in, then the next step is the refi to pay off the debt. From the info you gave, you have great equity and lenders always love to see that. But yeah, they are going to ask for your financials, so you'll need to show recent income. If you aren't currently local to where the house is, maybe consider finding a reasonably priced lawyer to handle the legal things. I'm probably not clear on why you had to take time off to deal with it. Anyway, you do have options! First step is obtaining legal possession. Best!

[tnhomestead]

Ex long haul, now local sorta. Spent a lot of years homeless in a truck. If you like it get it. Asl a local realtor what it might be worth fixed up, and then decide.

I had some land and then my ma passed and left me some money so I built. Did a lot of interior myself, still not done. So hire someone, easier by far.