***@*@*** What In The Blue Blazes Wrong With Mortgage Companies!?!?!!!

Tiamat · February 4, 2003, 20:18

UUUUGHHHHHHHHHHHHHHH!!!!!!!!!!!!!! I could just freeking scream from here to Canada!!!

I don't understand mortgage companies. I don't understand the whole process whereby they just willy nilly decide your fate! All of Steve's life (husband) he has lived by his means. If he couldn't pay for it in cash then he felt like he didn't need it.

So now when we are going to purchase the home we've been living in we come up on all these stumbling blocks like I didn't know you have to have a credit score we found out ours is 563 it isn't great but it isn't the worst. He has a car note and we just got some credit with a furniture store which will help but it's just so frustrating to be penelized for paying your bills.

We've lived here for 3 months...signed a 6 months lease and now our landlord may not renew the lease if we can't get the financing. Which would suck!! We have a great country cottage on 5 acres of land with a horse stall I've spent months decortaing it and we both just love it here. It's beautiful with the countryside right out your front door.....leaves changing colors....

I don't want to think about loosing the place but the way they have things set up you just can't win for loosing.

What does it take to get someone with not much credit but some into a freeking house?!?!!!

Wittlich · February 4, 2003, 20:27

Have you checked with Fannie Mae by any chance?

Here's a link to their home page:
http://www.fanniemae.com/

Tiamat, I know trying to get a mortgage lender is a pain, and it is a rather long process...but as long as you have paid your bills on time, don't worry - you'll get the loan...it will just take awhile.

Dis · February 4, 2003, 20:30

I hear you Tiamat.

I am the same way! In fact are you sure your husband is not me?

I had trouble getting my home. And it is a cheapo home under $100,000. The only thing I ever used credit for was buying my Dodge Ram for $20,000. And I had a couple of credit cards, but I usally payed them off.

If worst came to worst I could have used my veteran status to secure a loan. But that's a one time deal and I didn't want to waste it yet.

Tiamat · February 4, 2003, 20:36

She's only asking 115,000.00 with the land which is a steal! The problem is that the only loan Steve has ever taken out is his car loan and until recently the furniture. They did say they could use alturnative means of credit like electric bill, car loan, the furniture etc.....but they need at least 6 to 12 months to establish that and if the landloard won't agree then we are stuck scrambling to get this done or at least find someone who will do it before the end of April when the lease is up.

She is going to let us know in a few days if she will renew which at this point looks like the best shot we have

I mean really how could they not let us have the house it even has a white pickett fence for cripes sake

Jon Shafer · February 4, 2003, 20:48

That's too bad Tiamat.

Hopefully everything will work out for you guys... let us know how things end.

Flubber · February 4, 2003, 20:51

It is unfortunate how you are getting caught. I never had this problem as my parents advised me early on to get a credit card and use it frequently for things that I would pay off before any interest would accrue. The result was a good rating.

I do think it sucks that people who do not borrow can have a hassle but it is the system and I have learned to work within it

Most mortgage folks are driven by the computer anyway anyway-- I think thinking things through is discouraged. I remember when I was getting my approval for my first mortgage, they originally told me I only qualified for something like 70,000. I was suprised until I noticed they were counting a 650 per month loan against me as a liability. I had to point out the them that the loan was with them and the last payment was due in about 15 days ( before the mortgage funds would even be advanced-- ie I did have a 650 per month payment but I only had one payment left

Even then she had to "check with her supervisor" before adjusting the numbers. Before that, she suggested I put it on my credit card so the "payment " would only be 50 bucks (they only count the minimum required payment as a liability for CC balances). If I did that her computer said everything was OK. I refused and her supervisor apparently had sense enough to see my logic.

chequita guevara · February 4, 2003, 21:08

There are programs to help people with marginal credit get houses. Contact Fannie Mae. They should be able to point you in the right direction. I don't suppose your hubbie's a veteran?

Dis · February 4, 2003, 21:11

I also suggest bending the rules a little bit.

I found small company that was willing to bend the rules a little bit. They said that I was in the same line of work for the last 10 years. Even though in reality the stuff I did in the navy wasn't that related to what I do now.

although this small company ended up transferring the loan to Chase Manhatten. The bank that turned me down the first time.

Oh well, long as I got the loan.

Lefty Scaevola · February 4, 2003, 21:24

There are are some mortgage lenders who have alternative methods of rating borrowers who have small but good credit histories. To save costs, most leanders of course go with esiest to use credit score systems.

Alexander's Horse · February 4, 2003, 21:26

Tiamat, one excellent way to get a good credit rating is to use a credit card for all your purchases and then pay it off in full each month.

You need to be disciplined but it has a number of benefits. Firstly your pay stays in your bank account earning interest or can be offset against your mortgage till you need to pay the credit card off. Big savings accrue on the mortgage over time because you pay it off faster. Thousands and thousands of dollars less interest.

Here we have cards with an interest free period (up to 55 days) so it costs you nothing to use the card if you pay off full the balance each month. Also credit card transactions are free so you save a large amount in bank fees (by not using ATM's much - using EFTOS to get cash out when you make other purchases saves even more). If the credit card has a reward program you also rack up lots of points - we get about $100 a month on average off our grocery bill plus discounted fuel for the cars.

You also end up with an enviable credit rating, which can lead to discounted credit and many other benefits.

Might not work the same in the States but worth investigating.

Ming · February 4, 2003, 21:34

For all those young people out there, this is a classic example of why you need to establish a credit history early on. The best thing to do is take out a loan from a bank. If it is your first loan, it will probably have to be a "secured loan" backed by some type of collateral, or co signed by your parents. Put the money in another account somewhere, and use it to pay off the loan. Make all your payments on time. When the loan is paid, then go ask for a bigger loan... it probably won't have to be a secured loan this time since the bank will like you a lot more now. Again, put the money in another account, and make your payments on time.

When this loan is paid off... You will be able to walk into that bank in the future and pretty much ask for anything you want... they will be dying to give it to you.

Start early in life... a good credit history can be very important.

Dis · February 4, 2003, 21:37

actually no.

My lender for my house said to not pay off your credit card in full. That is what I have been doing.

A better way he said. Was to pay off your credit card in progressive amounts. And after a few months pay it off.

Tiamat · February 4, 2003, 22:11

**sits back and marvels at the power of polly** Thanks for all the advice. I knew if I came here I could get a starting point. You get to the point in this process where you get so bogged down that your brain fogs over and you can't think.

No Steve isn't a veteran that would help. As for the credit card we are in the process of applying. Our bank will make us a loan against money we have in our savings ie: make us a loan and give us the money but our savings account money will freeze to make sure the debt is paid off or they just take it out of there. But the good thing about that is that if we do it that does show up on our credit report as a loan in good standing.

Ming is right. Learn from this. In theory Steve's idea worked for him. He lived alone for years and didn't require much as long as he had video games he was fine........frustrated me cause he plays for 8-10 hours at a time. Anyway he just always thought if he paid his bills and stayed out of debt that was fine. Now 10 years down the line you find out that it isn't true. You have credit but if you don't have credit you can't get the credit that you have to have!!! Wheeeeeeeeew

Steve wasn't much of a believer in the power of polly but after Asher was kind enough to solve his computer problem for him and now this.........**HEAVENLY MUSIC**HE HAS SEEN THE LIGHT

Skanky Burns · February 4, 2003, 22:26

That is what I am doing, AH.

Ming, doesn't that end up costing you money just to bump your credit rating up? Such as all the interest they charge you?

Dis · February 4, 2003, 22:26

Yeah I had credit cards. I thought that would be enough with my car loan but it wasn't

It would have also helped if I made more money

Alexander's Horse · February 4, 2003, 22:48

Once you get the mortgage, try and get a redraw facility - that means if you get ahead in your mortgage payments you can redraw that money and only pay the mortgage interest rate. This is the lowest loan interest rate you can get, much better than personal loans or credit card rates. It also means you only have one debt to manage and avoid all the fees and charges of multiple loans. You really get stiffed on personal loans, hire purchase and credit cards. Pay out that furniture loan as fast as you can they are the worst!!!! Then the cars!!!! AAArgh!!! NEVER borrow money to buy depreciating assets like cars!!! (unless you have to - I understand etc.)

Another thing to do if you have outstanding loans is refinance your mortgage once the property you buy goes up in value enough. Then pay out all your loans with higher interest rates and roll them into the mortgage. You will save very large sums of money in interest and lower your weekly repayment overheads substantially.

Also, get a variable interest rate loan and pay extra off whenever you can. This is an excellent way to save money and reduces both the time you take to pay off the mortgage and the interest charges. You can save literally tens of thousands of dollars by cutting the term of your loan this way. Even small additional payments, say 10 dollars extra each payment, add up hugely because of the compound effect. Put any lump sums you get into the mortgage as well and make your repayments weekly rather than monthly. Just doing this cuts the mortgage substantantially because interest is calculated monthly and weekly payments reduce the balance on which this is calculated. Just by paying weekly you actually make a couple of extra payments a year which comes straight off the bottom line of what you owe and has a lasting benefit in terms of interest you never have to pay.

Adam Smith · February 4, 2003, 23:04

Tiamat:

Check with some banks too. IIRC Bank of America has a program called Acorn which gets first time buyers set up to buy a house. They help you deal with credit issues, set up budgets, hold your hand through the mortgage application and sale process, etc. We sold our old house to a young Hispanic couple who were just starting out and had been through this program. Sellers and agents love to deal with Acorn buyers because they know there will be no surprises which would make the deal fall through at the last minute.

MattyBoy · February 5, 2003, 00:11

Horse, I suspect that credit cards are quite different in the US. Apparently Americans leave a ton of outstanding debt on their credit cards. Given the numbers that I saw, I would be very surprised if credit card interest rates are as bad there as they are here.

Does anybody know what the interest rates on credit cards are in the US or Aus (after interest free period runs out)? Australian credit card rates used to be insanely high.

Alexander's Horse · February 5, 2003, 00:16

Maybe, Tiamat would need to check.

Skanky Burns · February 5, 2003, 01:02

"Low" interest is around 11% (usually with no interest-free period), higher ones are at 15% (with interest free period).
The ones I have access to are anyway.

Ming · February 5, 2003, 01:06

Quote:

Originally posted by Skanky Burns
Ming, doesn't that end up costing you money just to bump your credit rating up? Such as all the interest they charge you?

But only marginally. If you borrow at a decent rate, you offset it by the interest earned while you pay the loan off. In the old days, when the stock market was on a roll, you could actually make a profit by investing the money... but those days a long gone for now

Tiamat · February 5, 2003, 01:40

We'd been told about the credit card idea except wouldn't the fact that he doesn't have much credit keep him from getting that credit card? Are we not banging our head up agains the preverbial wall?

Thanks for the Acorn reference. I will ask about that tomorrow. And the Fannie Mae idea turned out to be a plus for me. I used to work at a club/resturant/sheeeee sheeee pooooo poooo establishment, but one of the members there just recently happened to be appointed one of the new directors ceo type persons at the Fannie Mae foundation. So maybe it's time to look up old friends.