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wendyt_ca
04-18-2007, 11:46 AM
Hello,
My fiance and I are looking to buy a house. Combined we make almost 50k/year and he has good credit with only about 10k in debt. I on the other hand have bad credit because of 2 bills in collections that have not been paid for a longtime one is a old Rogers and one is a credit card which I had when I was a little bit younger then I am now and they add up to about $3000 and I can't get approved for consolodation anywhere. Then I have about 10k in loans and then some other small debt which isn't too much. We went with a mortgage broker who is a bit newer and she couldn't get us approved through a bank. We could get a $5000 downpayment and are only looking at getting a 90k house. I was wondering if anyone knows of any other ways of getting approved.

puppyluv
04-18-2007, 12:23 PM
I would hazard a guess to say the only ones that might help would be Citi or Wells, and chances are those rates would be high.

nbnewfie
04-18-2007, 12:47 PM
try Best Rate Advantage Group, on ROthesay Avenue..

hockeymom
04-18-2007, 02:12 PM
Try Chris Dunham at B.R.A.G (Best Rate Advantage Group).
If he can't do it for you, no one can.
His email address:
debtsolutions@nb.aibn.com

hockeymom
04-18-2007, 02:13 PM
I would hazard a guess to say the only ones that might help would be Citi or Wells, and chances are those rates would be high.


Wells Fargo does not buy houses, they only refinace homes that you currently own.

Smash
04-18-2007, 02:20 PM
Have you paid the old debts off yet? That would be a start, as it makes a difference to the banks etc... if you have paid them off or if they are still outstanding. And then try to re establish your credit over the next while. If you deal with a finance company or "some" of the brokers in town, you are going to pay dearly in interest. Think about a regular mortgage at a low interest rate... for the first five years or so you are paying interest only. If its at the finance company rates, you will be paying interest only for the first 10 years or so.:eek:

puppyluv
04-18-2007, 03:08 PM
Actually, Wells has many homes that they have "taken control of" again

tred816
04-19-2007, 05:56 AM
I had similar circumstances and here's what my fiance and I did. It wasn't a "plan" per se, just how we improved our credit and bought our first home.

Ordered copies of our credit reports from Equifax (you can do it online for free if you just give your address) Be prepared for your creditors to find you if you do this!!! lol
Set up weekly payments into RRSPs. This was a time consuming process, but over a year, we paid into them and when we did our taxes, we got a nice return.
Used the return to pay off my student loans and other debt
continued paying in to RRSPs for another year
Paid off outstanding debts on a monthly basis...this looks better than paying off all at once. It shows your initiative to get caught up
Applied at the bank and we were told where we stood. This helped us know what we needed to do to get approved.
Once we were approved all the RRSPs we'd paid in to were taken out under the home buyers plan and we weren't taxed on them. We can pay back over 15 years interest free.
Used the RRSPs to put down our down payment and pay for the closing costs on the house.
MOVED INTO OUR FIRST HOME!!! a very exciting experience indeed. It was a first for both of us and we're ecstatic and love the freedom.
Good Luck! It's a lot of work, but well worth it. Overall, we went from really bad credit to buying a $150,000 house in about a year and a half. It takes patience, but now we have unbelievable amounts of lenders begging us to take their money! Being responsible is the key. Don't apply for anything unless you have to. Each time you apply, your credit score takes a hit which lowers your score and looks bad on you.

Smash
04-19-2007, 06:36 AM
I had similar circumstances and here's what my fiance and I did. It wasn't a "plan" per se, just how we improved our credit and bought our first home.

Ordered copies of our credit reports from Equifax (you can do it online for free if you just give your address) Be prepared for your creditors to find you if you do this!!! lol
Set up weekly payments into RRSPs. This was a time consuming process, but over a year, we paid into them and when we did our taxes, we got a nice return.
Used the return to pay off my student loans and other debt
continued paying in to RRSPs for another year
Paid off outstanding debts on a monthly basis...this looks better than paying off all at once. It shows your initiative to get caught up
Applied at the bank and we were told where we stood. This helped us know what we needed to do to get approved.
Once we were approved all the RRSPs we'd paid in to were taken out under the home buyers plan and we weren't taxed on them. We can pay back over 15 years interest free.
Used the RRSPs to put down our down payment and pay for the closing costs on the house.
MOVED INTO OUR FIRST HOME!!! a very exciting experience indeed. It was a first for both of us and we're ecstatic and love the freedom.Good Luck! It's a lot of work, but well worth it. Overall, we went from really bad credit to buying a $150,000 house in about a year and a half. It takes patience, but now we have unbelievable amounts of lenders begging us to take their money! Being responsible is the key. Don't apply for anything unless you have to. Each time you apply, your credit score takes a hit which lowers your score and looks bad on you.


Congratulations and great job! It does take patience and lots of responsibility but soooo worth it in the end!

tred816
04-19-2007, 12:28 PM
Thanks :biggrin:

It's been well worth it.

vanessalynn5484
04-20-2007, 08:25 AM
...this is off topic and I apologize, but when I first glanced at the link to this thread on the main forum list page, I thought it said "Buying a Horse with Bad Credit." LOL!

I have found the advice helpful as well though! Now that I know it's not about buying a horse....


*rubs the sleep out of her eyes, and has another coffee*

wendyt_ca
04-20-2007, 09:18 AM
Thanks this is all great advice. No I haven't paid off the debts unfotunetly the funds aren't there for that. I was paying one of them monthly but they just weren't going anywhere and ended up being sent to collections who refuses anything but full payment.
We were hoping to get a house in the next couple of months so the rrsp thing might be too long term. Bt if we can't we wil definetly look into that. How did you get a large tax return from rrsps? I am not sure if we can at our jobs yet or not we've been at them less then a year so i don't think we can.

adm
04-20-2007, 10:35 AM
A couple of things:
- You can setup RRSP's through a financial planner or a bank, it doesn't matter what your work history is. You can pay into it montly or bi-weekly depending on where you go. The more you're able to save, the more your refund will be at tax time.
- It sounds as though you may want to speak to a credit counselling service. They can help you with your current debt load and will work with the creditors to iron out a repayment plan. Please don't take this personally, but you may want to slow down your desire to purchase a house and work on getting your finances in order first. Owning a house is a HUGE responsibility and you need to be prepared for potentially catastrophic events such as a leaking roof, burst pipes, etc. If you're having difficulty getting caught up in your current debt load you may be wise to continue renting for another year or two until you're a little more financially stable. When you're a home owner you don't have a landlord to turn to. If you miss a couple of mortgage payments the bank can reposses - not a good situation to be in. There is also property tax to consider, water & sewage, power and maintenance bills. Maybe you can look at renting a home for a while to help you decide?

Best of luck to you.

Thanks this is all great advice. No I haven't paid off the debts unfotunetly the funds aren't there for that. I was paying one of them monthly but they just weren't going anywhere and ended up being sent to collections who refuses anything but full payment.
We were hoping to get a house in the next couple of months so the rrsp thing might be too long term. Bt if we can't we wil definetly look into that. How did you get a large tax return from rrsps? I am not sure if we can at our jobs yet or not we've been at them less then a year so i don't think we can.

christine chittick
04-20-2007, 10:51 AM
You can go to different mortgage brokers and be lucky to find one that will take you on board regardless of your credit. The catch is - you will be charged ridiculous interest rates like 9-10% or possibly more.

There are places like Home Trust, Citi, and Xceed to name a few.

I'm not saying it to put you down, but there is way more to just look at than paying mortgage. There is heating, land taxes, water sewage, and general upkeep - on top of your regular monthly bills. Land taxes are usually included in your mortgage payment...a lot of people don't take in account the cost of regular bills plus the expenses etc. of owning a home.

I will use myself for example. I paid 99000.00 for my home with an interest rate of 9% - monthly mortgage payment is 784.90 (process of changing that now because that was the rate from teh previous owner and i assumed the mortgage). My land taxes are 1713.36/yr, I pay a monthly payment of 142.78 included in my mortgage which totals 915.80 alone. My water and sewage every 6 mos. is 348.00. My oil for months Sept thru to present is 1600.00 - and i have brand new windows and doors etc.

And then my utilities bill ( i have washer, dryer, and dishwasher, fridge, stove) is approx. 140.00. My cable/internet/phone/wireless (wireless is under small business plan) is approx. 320.00. My vehicle insurance is 60.00/mo and my house insurance is 60.00/mo.

So, without counting water & sewage, and heating every month and groceries, i am paying approx 1452.68 give or take for mortgage, land taxes, and utilities every month.

This is also not including things that need fixing immediately like the previous poster mentioned as catastrophic events ie. leaking roof, furnace breakdown, pipes bursting etc.

Ha - my furnace cost me 400.00 to fix this year, plus i had to purchase a new oil barrell which runs you about 1000.00 unless you know someone that can get them and install.

wendyt_ca
04-20-2007, 02:43 PM
I have been researching a house for the past year so I am well aware of all the costs. We can afford to have the house that is not the problem. The only reason 2 of my debts aren't paid is because they want the $3000 up front or they want nothing and I just don't have that upfront. Buying a house will actually help us financially because the house we are interested in is going to give us $3000 back at closing so that we can pay off those debts. So we will be put in a better place financially.
Property tax is included in the cost. I know the cost of water & sewage. The ppl who own the house now only pay $2200 a year for heat and lights. We wouldn't use as much as them because they have 3 kids, do 2-3 loads of dishes in the dish washer a day, do 3 loads of laundry a day washing and drying. We only do 2 loads of laundry a week in warm water and 2 dryer loads a week. I do maybe 3 loads of cold water loads that i hang up so it wouldn't be much extra then we are already paying for our lights as we live in a duplex which is costing as much as a house for lights. We have oil currently which we will never buy a house with again because it is more expensive then electric. Our apartment is insanly drafty and in the pas 6 months has cost us about $1000 for heat. This house would cost us less a month in utilities.
Trust me I NEVER jump into anything without thoroughly researching and planning for it. With the mortgage payment, sewage, heat and lights it would be the same if not less then what we pay now when you add all that up. The only thing that will be higher is the mortgage will be about $100 more then we pay for rent a month which we have although the other expenses just balance that out.
We spend about $7000 a year in rent which is crazy so we would rather put that into equity instead of feeling like we are just throwing it away on rent. We may not have a whole lot left every month for spending but we don't have a lifestyle where we need it, we can go without it. And everything has been recently redone in this house so there is less of a chance of something happening but also had something worked out so that we would be able to have that put away but only if we get the house.
And we won't be getting oil so the furnace breaking won't be an issue.
Lol I know a lot of ppl do jump into it but we have sat down with a advisor and we do have the money to afford it and it would put us in a much better place then we are now.

babydoll101
04-20-2007, 06:02 PM
Be careful of where you go for the loan. Make sure they are the only ones you go to. If they turn you down, chances are the next people will to. I say this because everytime you inquire about credit it goes down on your credit report and it gets counted against you. Lenders look at this. We went to the best rate group when we were looking to buy our first home. We (at the time) had very good credit so we went with our bank. I do however wish we had gone with them. Good luck and I hope you get the loan you want.

christine chittick
04-21-2007, 01:14 AM
yeah but several hits in a short period of time for the same thing does not count against you as badly.

wendyt_ca
04-23-2007, 09:11 AM
Even if it's for the same thing a lot of hits in a short amount of time is just as bad. That's why we arent going to too many places because we wont be able to get approved at all if we get too many hits. It can kill your credit

christine chittick
04-23-2007, 12:46 PM
ok well i must have read it wrong on credit alert. Sorry.. :)

karen
04-23-2007, 01:16 PM
Get him to apply for the mortgage by himself and once you have cleared up your finanacial situation, refinance your mortgage or how ever they do it so you are on the mortgage.

christine chittick
04-24-2007, 05:54 PM
Yes that is what I am doing, good advice from previous poster! :)

wendyt_ca
04-25-2007, 09:05 AM
Yeah i'm not really concerned about being on the mortgage I'm just not sure if he would be able to get it in only his name I think he needs my income.

tipsybull
05-18-2007, 12:10 PM
First note: Applying for a 'mortgage' at many banks does not affect your Beacon Score (your credit report) if they are done in a small time frame....Equifax recognises this as 'shopping aorund for the best rate'.

Second note: You need an account manager at your bank to sit down with you. You tell them your plan - have it all organized, how much you owe, how much you bring in, how much you can afford to pay monthly for you loan,etc. I know you said they wont give you a consolidation loan, but they will if you show sincerity, they will. They will give you your credit report and send you on your way home to call all of the debtors and you negotiate the balance owing. THEY WILL DROP THE PRICE. After you have "settled", you go back to the bank. They will not hand you the money, they will write cheques to the people you owe money to, you send them on their way and ask for faxed "letter of releases" and be sure to ask them to update your credit report as part of the deal (they are not obligated on any time frame).
VOILA -from this point forward you are on the path to recovering you good credit!! It is a bit of work calling the creditors, but you get the hang of it!!
If you want to PAY ME, I'll do it for you :) I've become quite good :)

BEST OF LUCK TO YOU!!!

tipsybull
05-18-2007, 12:13 PM
PS > Quite often they will cut the debt in half to have it considered 'paid in full'.........keep that in mind while you are negotiating......also and ones at a collection agency, they have "purchased" you account for whatever company had it for quite often "pennies per dollar owed" ;)

tipsybull
05-18-2007, 12:17 PM
OH and I noticed someone mentioned XCEED Mortgage - they have decent rates and Cynthia Stites from Century 21 Group (in Hilyard Place) CAN GET you a mortgage through them or one of many others (she is a broker, who worked her butt off for us) once your credit is fixed .

Your current debts need to be paid though regardless......or settled.

Hope this all helps!

GAWD I remembered those stressful days quite vividly it seems.....I'm a homeowner of 3 years now lol

StephRan
05-18-2007, 06:23 PM
We had Cynthia as our Broker too; we got our mortgage from MCAP. When we went to the lawyer on the closing date, MCAP had not yet sent our money. We nearly lost our 5% downpayment. We did however end up losing the appliances that were to come with the house. MCAP mailed us a $500.00 gift certificate from Home Depot for the loss that the cause us.:mad:
Cynthia is a very nice lady:)

mrvegaman
05-30-2007, 08:02 AM
You may want to call NB Housing. You can get your downpayment and closing cost tru them for a really low interrest rate. It is for first time home buyers only. they only have so much funding for this each year so i would give them a call b4 too long.

wendyt_ca
05-31-2007, 09:27 AM
Yeah I have been trying really hard to figure out a way to pay these bills off. I have worked closely with a few different ppl about a consolidation and explained what I could do and such and they couldn't even give me a $3000 consolidation. The only option I have been able to figure out right now is spend the next 2 years paying off our debt. Then in 2 years we will have no more loans, credit card, collections ets. We tried Best Rate Advantage group and they couldn't do anything either to get us a mortgage or help us consolidate our debts. Just seems like we can't catch a break. We really want to get everything on track but no one will give us the opportunity so we have to do it the long and torcherous way and still deal with collectors calling because we can only pay off one bill at a time. It's extremly frustrating.

girdy
05-31-2007, 02:01 PM
Yeah i'm not really concerned about being on the mortgage I'm just not sure if he would be able to get it in only his name I think he needs my income.

The last thing he needs on his mortgage application, is your bad credit rating, which would be far more damaging than a smaller income.

I think your only hope for Plan A is for him to look for a mortgage without your bad credit holding back the application, and Plan B is to get rid of the bad debts before trying this again.

Like many others, I recommend Plan B.

kerrclan1
06-01-2007, 06:42 PM
Try setting up a meeting with Tom Zed. Not sure of his number but he is a lawyer uptown. He has houses and sells them to people or he will help you buy a certain house if you have one in mind. The interest rates are high, around 9 percent. But if its a house you want he can probably get it for you. We were having same problem with bad credit and he got one for us.

The_Dave
06-06-2007, 12:17 AM
Take your $5000 down payment and use $3000 grand to pay off the debts in collection first. Until they are payed, you won't have much luck getting a home unless you find a rent to own deal.

wendyt_ca
06-07-2007, 08:39 AM
We were going to be borrowing the downpayment from my fiance's mother. And she will only lend it for a downpayment not to pay off the debts. And even if we pay off the debts they would still want a downpayment. Already thought of that one :)

girdy
06-07-2007, 08:59 AM
We were going to be borrowing the downpayment from my fiance's mother. And she will only lend it for a downpayment not to pay off the debts. And even if we pay off the debts they would still want a downpayment. Already thought of that one :)

Ya, I expect the banks will be alarmed at you borrowing the down payment. In my experience, you need to demonstrate to them that you have the money for the down payment and closing costs, and any financer is likely to ask for copies of your bank reports so that they can see that you've had the money in your account for some time.

The_Dave
06-07-2007, 03:00 PM
If you use the money to pay off your debts, ie. collections, wait about 6 months or so until your credit score goes back up, also in the meantime save a little money, you can get 100 percent financing at say the going rate of 5.25 or so and also get cash back for closing costs. This happens all the time, but until you get the collection debts paid, CMHC or any other insurer will not touch you.
Talk to any mortgage broker and they will tell you this.

PS you would still have 2 grand left of the down payment, throw it in the bank and do not touch it and keep adding to it over the 6 months or so and also pay on any other bills you have to add to you credit history.

anthony
06-07-2007, 04:10 PM
Christine is 100% right in her post of all the "additonal" expenses other than mortgage. Mortgage is about half of the equation if anybody thinks otherwise they will soon find themselves in financial dires straits. ! :)

wendyt_ca
06-08-2007, 08:58 AM
Actually we wouldn't tell the bank it was borrowed from his mom and we would get a gift letter which is perfectly acceptable to a bank.
As for using the money for bills we can't because we can only get the money and use it towards the downpayment, his mother won't lend it to us for the debts it has to be for the downpayment only. And the bank still wants 4% even if it is paid off. We decided we are just going to wait 2 years and pay everything off and then save up a downpayment and by then it will have been a year since mine had been paid off.

And Anthony I am well aware of all the additional costs of having a house I have researched it and I know the costs.

The_Dave
06-08-2007, 09:33 AM
Good Luck wendyt_ca, I hope everything works out for you two. Saving and paying off bills is the best way. My girlfriend are I are doing that also.

PS You probably know this, but work on the collections first.

Flaxie
06-08-2007, 06:36 PM
As a first time home buyer last yr I did not have to put down a down payment. I have "new credit" which is almost as bad as bad credit lol
You need a good real estate agent and a good mortgage broker to get you the best you can qualify for.

Happy hunting! :D

Xmariner
06-11-2007, 12:00 AM
As a first time home buyer last yr I did not have to put down a down payment. I have "new credit" which is almost as bad as bad credit
:D
Actually new credit is much better than bad credit. New credit you can steadily improve and quickly have great credit. Unfortunately with bad credit, it sticks around for a long time. As a mortgage broker myself, I personally would recommend bankrupcy if you owed more debt. Once you are discharged after 9 months, you have virtually a clean slate and it's not that hard to get approved as long as your employment is solid. But with only owing 3k, it would be pretty hard to prove that you need to claim bankrupcy. There are also other ways to get into a house. There are private lenders out there willing to take a chance if you have job stability. I hope you guys get what you want regardless. 2 years is a long time to wait when you want something yesterday :)
Good luck wendyt_ca I hope things end up going well for you.

wendyt_ca
06-11-2007, 08:53 AM
Yeah new credit is definetly a lot better then bad credit lol. When I had new credit I got things no problem bad credit is much worse.
Yeah I am not sure who any private lenders are so I think we may have to wait the 2 years, The main reason we hate waiting so long is because with the new refinery house prices are expected to skyrocket. Bankrupcy definetly wouldn't be worth it and yes we are paying off the collections firts lol

Flaxie
06-12-2007, 07:54 AM
Hmm thats odd since my mortgage broker and a loan officer both told me my "new credit" was no better then my previous "bad credit". Of course this was after I spent 4 years working hard to pay off old debts I accrued while "young and foolish". Perhaps I should have just declared bankruptcy and been done with it.
Mind you I prefer the route I chose. I work in the insurance industry and personal bankruptcy has a drastic effect on a person's ability to advance in this field. I have agents under me who claimed bankrupt in the 70's who still have to write out explainations every time they apply for a new license.