Looking for Advice on Credit, Mortgages, Real Estate

Sometimes if you talk to a credit union or bank, they will agree to give you a mortgage only if you buy one of THEIR houses - i.e., a house that the bank now owns because somebody foreclosed on it.

My husband is a branch manager at Top Flite Financial in East Lansing. He can help you fix up your credit and see you into your home in the near future. Give him a call:
Justin Kidd
###-###-####
2760 East Lansing Dr.
East Lansing, Mi

He's been in the mortgage business for 10 years and has recently opened his own branch at Top Flite Financial.
Good luck! :)

The good news is that it is never too late to start rebuilding your credit--but it can take time. Pull both of your credit reports (maybe go to your bank and have the loan officer pull your credit and give you a copy of the credit report). Once you get a copy of it take a look at what is being reported...student loans, credit cards, auto loans/auto leases. Unfortunately, rent doesn't show up on your credit report and likely will not help your chances of getting a mortgage. You need to make sure you pay every account on your credit report on time EVERY month. I'm not sure what type of references you have, but typically lenders only care about how you've handled paying past debts--that is their best way to predit how you will pay your debts in the future. You may be able to open a small secured line of credit from your bank that will start showing up on your credit report. Also, you mentioned that he paid off his debt. Make sure that you have PROOF that any collections/judgements have been paid in full--you can get this information from the creditors that are reporting you--this will help you because a lot of collection companies do not show your collections as paid off when it is paid.
As for purchasing a home....you will likely need at least 5% downpayment if not more, depending on how low your credit score is. Without knowing what your income is, I can't tell you how much home you would be able to afford. Also, overtime/bonus/car allowance income is not always used, so you may qualify you for a lower home price based on base salary/hourly wage.

If you have any other specific questions, feel free to send me a message. I am always happy to help when I can.

When we were looking at buying a house our bank told us that even though we had a couple of open credit cards it wasn't enough revolving credit. So I would ask your lender or banking institute about revolving credit. They were talking more along the lines of like a car loan or getting some type of furniture through a furniture store on a credit line where you are making payments. Even though logically since your trying to buy a house you probablly can't afford a car payment or dont need a another car but those were the couple of things they told us that would give us revolving credit. Then on top of that even though we could get a 100,000 house loan no one would approve us to even get furniture to improve our credit so not really sure. Again I would just ask the bank what you can do. Hope you find what you need.

I'm not sure which part of Michigan you are in, but we used a broker to get our loan. We didn't need anything down and we had no credit, the only stipulation we had was that we had to pay off our debts that were on our credit report. If you'd like me to send you our broker's name please let me know and I'll get his name for you. This was our first house, so we were able to get a first time home buyers loan and like I said we payed nothing out of pocket..... even our inspection got put into the loan. Oh and our price for using the broker.... $200.00 (was also put into the loan lol, and the sellers paid our closing cost.., so we literally had to pay no money) (and we had never bought a car, we had never had a credit card etc etc etc)

Best I can tell you is to go see a lender and he/she will give you ideas of how to raise your credit score. We see Matt McAllister with 5/3 Bank. He's in Livonia and Northville. He ran a few different scenerios with us to see which loan would be the best for us. (however we already had ahouse picked out and knew what we wanted to spend) We used 5/3 with our house in KY as well. They were very helpful and being that we were in a time crunch they worked hard to get things processed quickly.

Choosing the right bank isn't always enough. The person you are dealing with is the person you are supposed to trust with all this. So make sure you are comfortable with your broker.

When you run your numbers to see what you think you can afford...don't forget taxes! Property taxes can drive up your payment considerably, there will also be home owners insurance, realtor fees, all kinds of fees...so make sure you talk to your broker and research ALL of it. The more you know going into this the better off you will be.

If you have too many credit checks or hits on your record that can lower your score as well. This means you shouldn't apply for every credit card under the sun. Every time someone checks your score you get what they call a hit. I'm not sure why it's a bad thing but it is! LOL

It will also help if he has some bills in his name as well as if you have a few in yours. That will show a history of bill payment.

Not sure if he'll get a loan but DO speak with a consultant. They will give you all the best information on how to raise your score.

Also, the more money you put down intially will mean that you will need a smaller loan and will give you a better chance at obtaining one.

Lastly...whatever you do...no matter how tempting it seems at first...DO NOT GET AN ADJUSTABLE MORTGAGE! AKA baloon. This means that after a certain amount of time your rate will change and can either drive payments up or down...MOST LIKELY UP. That's how most people got into trouble even before the auto industry failed. You will start out with a nice low payment then two - five years later it jumps past what you can afford month to month.

Buying a house is a BIG purchase and you don't want to get taken for a ride. So pleas ask all the questions you can think of and ask others to think of questions for you.

Good luck with the loan and the house hunt!

B.,

What an awesome adventure!!!! My adventure of home buying ends today with my closing!!!!!!

I was buying my house by myself, and I had a bad credit score. One of the things you can do, since you have about 9 months still, is to apply for a personal loan. Maybe 1k or something small like that. However, put that loan amount into a separate bank account and let the payments be drawn from that account, therefore you don't actually use your own money. The payments after 6 months will help boast your scores. You mention your husbands score, but not your own....... Look into your score. Typically the lender will blend both of your scores, so if you have a good score and your husband has a bad score, your final score will be somewhere in between those two.

Depending on the lender you use (I used Bank of America), they use either your "Middle score" or your "Vantage Score" or most commonly your FICO Score. There is a great forum out there at www.myfico.com that is absolutely full of wonderful credit repairing advice. Simulators, etc. You can sign up for a free 30 day trial, and then the 'score watch' feature is 8.95/month (paid in full up front though).

For the actual loan business, I went with FHA. With FHA, their requirements are a bit more lenient than a conventional lender. I was only required to put 3.5% down on my property, and I have a 5.5% interest rate on a 30 year fixed mortgage.

Keep in mind that when you are shopping for your house, your real estate taxes, private mortgage insurance (PMI), homeowners insurance, and your principle & interest payments are all rolled in. I'm buying my house for 66k and my monthly payments are about 640. It's cheaper than my rent......

Make sure you get your preapproval first before you start looking. And be careful, it is a buyers market, but depending on what you have to spend you could be fighting against investors or people looking to flip properties. I lost 4 other bids before finally getting this house accepted and now ready to close.

I signed up for a ton of credit 'education' online tools (myfico.com and truecredit.com) and I pulled my credit reports daily. It doesn't hurt your score to pull your own credit report/score, but if another person/company does it for you, you will take a 'ding' to your score. Usually about a point or two.

FHA requires a 580 minimum score for a mortgage.... but many lenders are requiring at least a 600 because of the market and how the economy has tanked. They want to make sure that they will lend to people who will pay their mortgage off, instead of people who will walk away from their house.

With you still being in your lease, keep in mind that the homebuying process is not a quick one anymore. I got my preapproval in January, and I'm finally closing in July. I had a few months were I stopped looking (after looking at about 30 houses) and then went back into the game and looked at another 30 houses before finding this one. Some of them were really bad.... and some were okay, and some were just too good to be true. Those ones went really fast! From the time that I had my accepted offer it's been 30 days.... You'll need money up front (1k or so) for your Earnest Money Deposit, and your lender should be able to provide you with a Good Faith Estimate of closing costs, monthly payment, etc, when you find a house you like. You'll also need to pay for an inspection, which will run you approximately 250 and up. However, listen to the "Closing" horror stories out there and be prepared. Based on my GFE and the time when I'm closing, my closing costs are about 500 more than anticipated.... I've heard worse stories about 1k more, and the people needing to get a "gift' from a family member so they could close. I had to borrow 250 from my folks to be able to close today...

Feel free to send me a message if you have any questions. Since I was doing this all by myself, I had to make sure I knew everything I could about it.

Ooh, and I know HUD has some incentives if you buy a HUD home and finance with FHA..... You might want to look into that too.

HAVE FUN & GOOD LUCK!!!!!

I went thhrough the same thing. I started in January and it took approximately 60-90 days. I applied to Truecredit.com so that I could monitor what was going on and to make sure there was nothing on my credit report that would hinder me from buying. You want to do the following things to raise his score (as told to me by me lender and it worked):
-Apply for a Target card (or something similiar)
-Send disputes to any creditor through the credit bureaus that have not updated his information (pay offs, settlements, etc.)
-Have the Rental Company to give you a letter on their letterhead stating that you've never been late on your rent, you can also send this to credit bureau's to put on file.
-Apply for a credit card through your bank or credit union. This is a better option than getting a secured card. Also, if you are not with a credit union, you may want to open up an account with them. They have better rates and are more flexible. I was able to get a Platinum Visa instead of taking out a loan and since I pay my card on time, it is better for my credit score.

I was able to clear up my credit in January, raise my score, and I closed on my house in September (2008). I applied for a house loan in July of 2008 so I hope this is encouragement to let you know that it doesn't take long you just have to be consistent. And I did all of this while I was leaving my husband, so because it's the two of you, things should go very smoothly...Good Luck!

B. - you have already received a ton of good advice, I would like to add that it is a good idea to "run the numbers". Find and amortization site online - I use 2 different ones and the results are similar but not exact. This will give you the opportunity to see what the loan will cost you (monthly payments and total interest), so you will have an idea of how much money to borrow, the interest rate you need and how long it will take to pay back. You stated that you wanted to stay in the $800 range, so your mortgage payments need to be about $550 - property taxes and insurance will eat up the rest very quickly.

Definitely apply for a couple of small cards - try to get ones that allow 6-12 months interest free and schedule your payments to have them paid off before you are charged any interest - this will give you your revolving credit without having to pay anything extra for the priviledge (if you use the credit to buy things for your new house, leave the stuff boxed up so it will be easier to move next year.)

Congratulations and enjoy the journey.

Buying a house is very exciting and now is the time to buy!

There are soooo many options available out there, I'm sure you can find a loan to fit your circumstances and still get a low interest rate. Just make sure you get a FIXED rate and not one of those balloons! We used Flagstar Bank and Gloria Perry at the Lansing office on St. Joe was very helpful. We had 53 with our last mortgage and I cannot stand 53. They're just not helpful and are so large that even if they make a mistake they have to go through so much paperwork and through different offices before they can even fix it and in the meantime you have another office blaming you for the bank's mistake because they didn't get the paperwork! Other people I know have had similar experiences with them too. So I would stay away from them.

But, check around with a couple different companies. I hear broker's are expensive so I wouldn't go with a broker to get a house either.

Good luck!

First, congratulations, buying a home is soooo exciting! You have received lots of good advice here so I won't repeat it, but no one mentioned/referred a good real estate agent or mortgage broker. THE best agent is Robert Visingardi at Remax ###-###-####. He previews homes for you so you don't have to waste your time looking at junk and he's been in the business for a looong time so he knows what he's doing. Highly, highly recommend him. Also, a good mortgage broker is Rob Laperre at Great Lakes Mortgage ###-###-####. Both of these guys would be willing to give advice and let you pick their brains even if you don't end up using them. Good luck!

Instead of contacting a specific bank directly for a loan contact a "mortgage broker". You don't pay fee's to use them - the banks pay the fee to them for bringing them a customer. We have always used one everytime we have done a mortgage. Our guy knows which programs are currently being offered for first time buyers, they can tell you what you need to do to bring up your score if it is even necessary (my husband had some issues and we had no problems - of course that was before the big "credit crisis".) They also know which banks are extending credit and which one's to stay away from. If you contact one now they can at least tell you what you need to do between now and March when you are ready to buy -if anything. If you want to keep your payment the same you are probably going to need to look at a house around $100,000 or less so you should start researching areas where you can find something you like in that price range. Buying a home can be frustrating (even though it is rewarding) but the more you plan ahead the easier it will go. Good Luck.

HI B.,

Unfortunately, the biggie on the credit score is debt vs. open lines of credit. And credit score is really what banks use, as well as your income to determine what they will approve you for.

I would suggest opening a couple lines of credit to boost things. As already mentioned, your rent payments will not be taken into consideration. And, as already mentioned... make sure you pay EVERYTHING ON TIME. Utilities, loans, car payments... whatever... make sure it is done on time. Every time.

Since you do have until March/April... you have some time. Credit reports get updated every 3 months or so, consequently you can built up your credit and work on it for a cycle or two and THEN apply for a mortgage.

As already mentioned you will have to put money down. I think it is FHA that goes as low as 5%. FHA is a great way to go as it will allow you to put less down. HOwever, the days of 0% down are gone. I do know that much.

Also, often times trying to buy a house in the late fall/winter is better. I used to sell Real Estate and people tend to put their house on the market in the spring/summer. By late fall/winter... it has been on the market awhile and prices have dropped. I would say make sure you work with a reputable Realtor...but in this market, it seems like all the bad ones are gone. Once you're there, make sure you have your pre-approval first so you know what you can afford. In addition to what your down payment is, you will also incur closing costs, which are typically about 3% of the purchase price. When I was in Real Estate you could typically get the seller to pick up all the closing costs. However, I don't know what is going on today....with so many people upside down on their mortgages, many just can't afford to do it I suspect. Ask your Realtor about it. Oh, and Realtor costs are paid by the seller. ;-) It is worth it to use your own Realtor, they will advocate for you and help you negotiate the best price as well as navigate the sometimes tricky and confusing world of Real Estate.

Good luck!