Author Topic: Getting Qualified for a Mortgage with Bad Credit  (Read 1987 times)

mrsggrowsveg

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Getting Qualified for a Mortgage with Bad Credit
« on: April 11, 2014, 07:12:44 AM »
My sister came out of a bad relationship a few years ago and was left with all of their debt.  Due to a very limited income, she defaulted on some of the loans.  Now she is with the man she plans to marry, has a great job and they are ready to buy a house together.  They live in a low COL area, so they don't need much for a nice house.  Because of her credit, they have had trouble qualifying for a loan.  All of her old debts are paid and their only debts now are a car loan of $10,000+ for each of them (they won't sell the cars for anything cheaper).  The couple has four large dogs and has had great difficulty finding any decent houses to rent.  Does anyone have any tips to help improve credit or get qualified for a mortgage? 

Rural

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Re: Getting Qualified for a Mortgage with Bad Credit
« Reply #1 on: April 11, 2014, 07:20:57 AM »
Can he qualify on his income alone?  If so, her credit won't be run it all.

mrsggrowsveg

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Re: Getting Qualified for a Mortgage with Bad Credit
« Reply #2 on: April 11, 2014, 07:28:14 AM »
There would not be enough income, especially with the car debt.

nereo

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Re: Getting Qualified for a Mortgage with Bad Credit
« Reply #3 on: April 11, 2014, 07:36:04 AM »
There would not be enough income, especially with the car debt.
Income doesn't influence a person's FICO credit score (shocking, I know).  Lenders may ask about income, but it's secondary.  Mostly they do a 'debt-to-income' ratio to computer the feasibility for that person to pay back a loan.
Regardless the main components a person can control are credit history, and the amount of credit they are currently using (both as a function of their total issued credit and to their income).
He can probably raise his credit score significantly by paying down his car loan.  Otherwise, time is the only thing likely to help - continuing to make on-time payments every month.  In most cases your sister's defaults will dissapear from here record after 7 years.

Best of luck to them.