Credit problems/Mortgage loan.... Help?

Discussion in 'After Hours Lounge (Off Topic)' started by Scott Wong, Aug 10, 2003.

  1. Scott Wong

    Scott Wong Second Unit

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    I did a search but didn't quite find anything as specific as my problem.

    My girlfriend and I are currently renting a two bedroom apartment here in the Twin Cities. (Eden Prairie, Minnesota to be most specific). We are currently paying $1,085/mo. And well, I'm tired of it.

    We decided to try Edina Realty. We spoke to a very nice agent who wants to help us find a home. However, we first need to qualify for a mortgage loan. We spoke to a loan officer there and filled out all of the necessary paperwork. We also made a neat file for her with our recent payment stubs, 2 months worth of bank statements, old W-2 forms, etc, etc.

    Here's the problem: I guess my credit is pretty good. Well, at least better than average. My credit/beacon score is in the high 700's. However, my girlfriend has extremely poor credit. A few years ago and well before we began dating, her purse was stolen from her car. She notified credit card companies, however, the purse snatcher managed to write out several checks to various establishments. Quite a few checks were written out. After receiving no money, it looks as though they were all charged off by the various companies who then took the checks to collecting agencies. I have a copy of her credit report from Experian and it doesn't look good at all. Every account was taken to a collection agency and is either pending or has already been charged off except for one (there are a total of 14 "accounts"). [​IMG] My girlfriend advised she did call the bank but obviously, the checks had already been written. I'm not even sure where to begin getting this straightened out...

    The loan officer called me back on Friday and advised me together there is no way in heck we're going to get a mortgage loan with an "A"-type mortgage. (I pretty much knew this though) She did advise me there are several other options for people with less than perfect credit, however, I am not sure if she has explored these options. She did mention that with my credit being as good as it is, I might be able to get the entire loan in my name, however, she would have to look further into this as I only make $33K-$35K/yr. (together, we make close to $65K-$70K) She is gong to call us back tomorrow with all of our available options. But this still worries me. I'm already assuming the worst case scenario in which she tells both of us to take a hike until we can get things straightened out. At first, I took this to be a learning experience and thought I'd humor ourselves by going to see if we could even qualify for a mortgage. But now that I've looked at the big picture, I'm tired of paying this $1,085/mo. and getting nothing in return.

    Has anyone run into this kind of issue before? Is my girlfriend's credit a lost cause? I don't know if there anyway of 'undoing' what is already done and especially since it happened a few years ago (09/2000).

    As always, any help is greatly appreciated.

    Scott.
     
  2. Jim Sentry

    Jim Sentry Stunt Coordinator

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    Get the collections reversed. Provide copy of police Report to all the agencies along with a letter from the Bank verifying checks were stolen.

    Also contact credit reporting agencies providing same info and request they update the report.
     
  3. Reginald Trent

    Reginald Trent Screenwriter

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    I'm not a lawyer but...I guess you could also consider getting the home in your name only because of your good credit then drawing up a separate legal document that give her half ownership if she pays her share of the debt. Whew sorry about the run on sentence/paragraph. [​IMG]
     
  4. Scott Wong

    Scott Wong Second Unit

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  5. rodney wiley

    rodney wiley Second Unit

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    Contact each credit agency and dispute the info on your girlfriends report. The burden of proof then lies on these agencies that have placed the negative info. If they don't respond within 30days the item must be removed from her report.
     
  6. Scott Wong

    Scott Wong Second Unit

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  7. MikeAlletto

    MikeAlletto Cinematographer

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    The problem isn't the mortgage its getting your girlfriends credit cleaned up. Contact the agencies and explain what happened and find out where to go next. That is the only thing you can do. Then when you finally fix it all start getting rid of those accounts. Thats an awful lot of accounts to carry.

    You should probably come to the realization that if you want to use both your credits its not gonna happen anytime soon. Concentrate on cleaning up her credit and worry about a house later.

    This should have been taken care of when the theft first occurred. All her accounts should have been cancelled and reported stolen. The bank should have taken care of the collection attempts since they were trying to collect on illegal purchases. She should probably think about getting a better bank that will actually take care of their customers.

     
  8. James Edward

    James Edward Supporting Actor

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    Good advice. The so-called sub-prime mortgage market is NOT an avenue that you want to go down. It is full of predatory lending practices, and they are so slick you'll have a hard time knowing what is legit and what's not.

    Get her straightened out...
     
  9. Jose Arellano

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    With your credit scores alone, you should be able to get an A credit loan. Just do a stated income program. As long as you feel you can afford the payment, get the loan solely under your name. If necessary, get an agreement drawn up between your girlfriend and yourself that says that half of that liability is hers if things go bad. I don't know if your state is a community-property state, but if it is, and you get married, it'll automatically be both of yours anyway. Look into this stated income program. If your lender right now can't do it, switch lenders. Email me if you have any questions. I'd do your loan for you if I could, but we're only licensed in Texas.
     
  10. nolesrule

    nolesrule Producer

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    Location:
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    Joe Kauffman
    Due to myself being unemployed and then self-employed, my wife's income was the only income that counted when applying for a mortgage. Her income at the time of the application was a couple thousand more than yours, but she had just recently gotten that job and her income only a few months earlier was much less.

    We were able to get an 80-15-5 mortgage arrangement with total monthly payments of around $870 on a $106k sell-price home on her income alone. She was qualified for something around $125k but we wanted to keep our payments down.

    If you have the money for a bigger down payment than we did (don't forget to add in closing costs), you can probably get something even more expensive.

    Doing it with a single name can be dicy for the person who's name is not on the paperwork if both people are actually contributing to the payments, because in the event of a split of the relationship, how will the person who's name is not on the paperwork have a legal claim to any equity from his/her personal contributions? The answer to that is usually a legal contract.
     
  11. Scott Wong

    Scott Wong Second Unit

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  12. Scott Wong

    Scott Wong Second Unit

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  13. Drew Bethel

    Drew Bethel Screenwriter

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    Scott, paying your rent on time is good but the amount you pay is not important. The loan officer is looking at certain debt to income ratios depending on what program you are borrowing under.

    A few points to consider:

    (1)Do you have any debt (car, school) etc? The less debt you carry the more you will qaulify for.

    (2)Can you get a parent or relative to co-sign the loan with you?

    (3) You need to act quickly because rates are climbing evry day! Can you lock in for 60 days or so until all this crap is sorted out? Ask your loan officer. And don't be afraid to try another loan officer if this one is not giving you good service and advice.

    Good luck!
     
  14. David Preston

    David Preston Supporting Actor

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    IMHO you should be able to get it on your own. With a credit score like that you will be ok. You will probably get approved for about $115,000-$130,000. I agree with Jim Sentry's advice to fix your girlfriend's. I would say it's better to get it in one name only because if you by chance breakup(hopefully you won't) the house will still be tying you together for 15 or 30 years. I once had a friend who had a car financed with his girlfriend and they broke up. He had to call the bank every month to see if the payment was made and if it wasn't he had to call her. If she didn't pay it hurt his credit too. I hope everything goes well for you with your new home purchase. It is a very stressful time.
     
  15. PeteyG

    PeteyG Stunt Coordinator

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  16. Troy Madlem

    Troy Madlem Agent

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    If you're going to buy a house you'd be better off to purchase it on your own, then if your girlfriend is going to live there let her pay rent on it instead of paying half the mortgage. If you two do end up together the house is paid for and you continue living there. If you split up the mortgage is a reasonable amount that you can cover on your own and you don't have to deal with the issue of repaying her the portion of the mortgage payments she has been making.
     
  17. Scott Wong

    Scott Wong Second Unit

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  18. Scott Wong

    Scott Wong Second Unit

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  19. MikeAlletto

    MikeAlletto Cinematographer

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  20. Drew Bethel

    Drew Bethel Screenwriter

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    Scott, talk to your loan officer about getting a loan pre-approved based on your income and then locking in on the interest rate for as long as possible. Locking in guarantees that you will get the loan for the rate of the day you locked.

    Usually there is no charge to lock in on a rate for 40 days or less. Anything over 40 days may include a fee but it shouldn't be more that a few hundred dollars...or it maybe a percentage of the loan amount you are seeking. Check with your loan officer.

    As for debt/income ratios, go with an FHA loan as they have less stringent rations than conventional loans. Also, I recall US Bank starting a program a few months ago to assist with home purchases. Check their website or give them a call.

    If you need a referral for a loan officer let me know and I'll provide you the name of the lady I worked with.
     

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