Low 500 score question Please.

Dino679 · Joined: 04 Aug 2005 Posts: 9 Location: ny

Hello, my 1 score that I checked mth ago was 518, that was Experian..I had a Discharged chapter 7 in January 05', mostly credit card debt, chargeoffs, couple public record...I DO have a car loan positive for almost 2yrs and a small credit card after chpt 7 to reestablish....any idea, Im looking for a 135k house, 100% financing I would need...I was looking into Homebanc.com thanks for any replies.

Haplo · Joined: 20 Jan 2005 Posts: 2406 Location: Springfield, IL

It will be *very* unlikely that you will have 100% financing available after a chapter 7 unless you had sterling credit before the BK and have started to re-establish credit after. Assuming a 513 as your middle you may only be able to get 75-85%. If that happens to be your low you *might* have better options, but it won't be a huge jump.

I believe that on a purchase our guidelines allow us to do 85% at 520 or so. That's outside of my normal realm of expertise with our products, but it seems to me that's what I remember. That should give you a little bit of a guide anyway.

Oh, and it's very likely that your rate will not be pretty or that you will be paying several points in order to have a lower rate. With the BK just a few months ago it puts you in a higher-risk category.

Dino679 · Joined: 04 Aug 2005 Posts: 9 Location: ny

Thanks for the reply, dont want to sound stupid :oops: but, if they approve 75-85% could I buy a cheaper house? or no matter what I need 15-25% downpayment, thanks again..Dino

chow · Posted: Thu Aug 04, 2005 4:06 pm Post subject:

cheaper doesn't change the percentage. You actually have to have some money invested in the transaction to proove to the lender you are credit worthy.

You can't walk away from a house and car as easy as you can walk away from credit cards and other bills. Once you walk away from the cards and other bills, we look at you as a risk, until you prove to us you will pay, as agreed. If you walk away from a house or car, we tend to drag you to court, and then we track you down until we get all of our money.

This is sad but: True. I've spent most of my life helping creditors track people down at jobs or whatever they owned, that we legally could take, and sell- to pay off the debt.

We borrow our money to lend to you, so If you don't pay us back, we have to figure out how to pay our bills too. Make sense?

Think of it this way, You lend your best friend your car. He crashed it into a tree-driving drunk. Now, you have to go out and buy another car with your own money, and you're friend is sitting in jail, with no job, and can't pay you. He get's out of jail, and then comes and asks you to let you loan him your new car.

Would you just hand the keys over again without some security?

Dino679 · Joined: 04 Aug 2005 Posts: 9 Location: ny

I need 10% down :? ...Very happy I even got a mortgage but we have no way 10% to put down...not sure what to do!...thanks to all your replies.. :lol:

chow · Posted: Tue Aug 09, 2005 9:52 pm Post subject:

Prove you are credit worthy.

Save money.

don't apply for credit unless you have to,

and only after you have some savings.

DO NOT apply for the instant credit stuff. Build Net worth, and go back to the bank where your savings is, and get a note for 90 days. Pay it back on time, Then go get another one, and pay it back fast. Work with your banker,and CU office. You just washed all of your creditors down a drain, so think about how you would feel if someone just took your money and kicked you to the curb. :wink:

Dino679 · Joined: 04 Aug 2005 Posts: 9 Location: ny

thanks for tips chow, ill have to wait till tax return time and by then my scores will be higher, I will not apply for any credit..thanks again.