teacherhere wrote:
I am a teacher, I make about 55,000. Mid credit scores is 700. Nothing negative on credit report in 10 years accept for two issues that I will address in a second.
No debt accept for car loan payment of 455 and a credit card payment of 168. I am due a settlement for an accident this month of 23,500. Combine that with my savings and I will have 34,000. I I plan to pay off my car early. This will leave me with 21,000 in savings and a really good debt ratio (under 5%) as well as utilization (8%) (I also assume that paying off my car will raise my FICO score, true?)
Back to the two negatives I mentioned above. First one is a debt from the mid to late 90's that was bought and new owner is trying to collect. Should I pay (only 200.00) and try to get them to take it off my report? dont touch it. you can pay it after closing. 99.99% of the time, you will do more harm by paying that now(based on your whole scenario) or since it is so old, just ignore it? I was told that since it was old, mortgage companies would not require it to be paid or would it hurt me? True? some might ask for it to be paid. some will not. varies by lender. fha does NOT require them paid!!!!
2nd issue is a larger issue. From 90-97, my credit was shot due to medical issues and then non payment of bills. Since then, I have had no further issues and everything has sinced scrolled off and like I mentioned above, I have had no negatives in 10 years or so. During that time I did not pay a student loan that was owned by the univerisity. They never said a thing about it.. All of the sudden a judgement appeared in March of this year for that amount (5,600) I am assuming that since it is a judgement, I need to pay it off and get it off of my reports before applying for a mortgage. True? will need to be paid..... unless you can get them to 'rehab' the debt. must be in rehab for at least 6 months for fha. What if I pay it off and they wont take it off of the report? Will a letter, the paid status and my otherwise clean report take care of it? yes Ok, so assuming I pay it, savings is now reduced to 14,400. (I also have my teacher's state retirement account) <= can you acces that money in an emergency? if not, then it is dead money and cannot be used for reserves
***** Yes they keep out 20% for taxes and 10% penalty but otherwise one can.
So with an income of 55,000, savings of 14,400, little debt and whatever the outcome of this judgement issue is.....what is the most I would qualify for? Not that I intend to be house rich and money poor but I want to know where I stand. do you know what the tax rates are where you live? that could affect max loan amount. also, if you are coastal, th homeowner's insurance will be higher and that too affects debt ratios
****** I live in South Central PA...I think the tax rates are 1%,, maybe a bit higher but not by much not coastal at all, on the PA/MD?WVA borders.
From what I have read, this will get me an FHA loan which is 3% down. I know they dont do 0% down.
Will I qualify for convetional loan? Could I get a 0% with a conventional do you think or will it probably be 5%? 5%. you might find 100% but you will find those deals hard to get.... or outrageous rates
Here is one other issue? I have only been at my job and in my rented townhouse for one year. I moved after a divorce which caused the break in employment. I was at my previous job for 8 years. How is this going to impact? Do I need to wait until the two year mark? maybe not. are you in the same line of work?
*****Yes, teaching, just different district, resigned in one area at the end of one year, moved and had a job for the beginning of the next year in new area
Lastly, someone told me that they believe that housing prices are going to continue to go down for another year and about 20% in that year and that if I can wait that year, I will be that much better off since I would be buying at the bottom of the market and it would have no where to go but up. True? depends on your market. where do you live?(buying)
*****South Central PA
Thanks for all of your help!
Lol, I am so sorry. I didn't realize how hard it was to read. I have highlighted my answers to your questions. Thanks for any help you can give!
