Bad credit- FHA loan possible?
My husband and I made huge mistakes about 5 years ago and destroyed our credit. We've since grown up and started a family. We are wondering if there is any possible way to qualify for an FHA loan. We can get a co-signor with good income and great credit (although he is 70 years old). My husband now makes almost 100,000/yr and has been at his job for four years and gotten several promotions. We still have a lot of unpaid debt (closed accounts/collections) but have been making regular payments on several current accounts. We paid cash for our car. We could probably make around a $30,000 down payment.
Thanks for your help!
- LandlordLv 77 years agoFavorite Answer
Nope, not with unpaid debt. Get everything paid and then maybe.
- MeganLv 44 years ago
If you have enough To put down 10%, then (as of Oct 2010 change) your credit score can be as low as 500. FHA does have issue with open collections, liens, judgments...(must be paid off before they will approve), FHA requires your past year's history to be clean (no more than 1 30 day delinq on revolving debt, absolutely none on your current mortgage or rental in past 12 months). Your biggest problem is that lenders are now requiring higher scores than FHA and most of the banks will not do an FHA if you don't have a 640. You may be better off since you intend to make a large down pmt to look at the /non-conforming market.
- real estate guyLv 77 years ago
You are STILL making mistakes.
First, to answer your question. NO! You still have collections and judgments. You will NEVER get a loan until these are paid off. Period. Even with a co-signer. They will still look at your credit.
You say you have 30,000 to put down and you paid cash for the car. You should have used the car money to pay off the debt a long time ago and then gotten a loan for the car (and YES, you could have gotten a car loan). And if you couldn't have gotten the loan, then you should be paid off the old debt and purchased a used one.
At this point you need to pay off the debt. Otherwise, you will never get out of this mess.
- linkus86Lv 77 years ago
FHA is a possibility. The key issue with FHA is that you will need to pay off all the people you already owe or at least get current on a payment plan. Other than that all you need are 12 consecutive months with no late payments and you are as good as gold, assuming you haven't had a bankruptcy in the past 2 years. In some cases you don't have to repay old medical bills in collections.
With $30k you should be able to pay most everyone you owe, remember FHA only requires 3.5% plus closing costs.
A co-signor is another route that could work but using a co-signor should only be a temporary fix and no other lender will allow you to refinance your loan only in your name down the road unless you pay off the people you already owe.
Bottom line, go to one of the large banks in your town and talk to a loan officer. Good Luck.
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- Glenn SLv 77 years ago
If you have unpaid collections on your credit history you will not get an FHA loan. It doesn't matter if you have a co-signer or not.
Collection accounts generally remain on your credit file for seven years from the date the account first became past due, leading to the account’s placement with a collection agency.
Judgments generally remain on your credit file for seven years from the date filed, whether satisfied (paid) or not.
Paid tax liens generally remain on your credit file for seven years from the date released (paid).
Unpaid tax liens generally remain on your credit file indefinitely, except California where paid or released tax liens remain on your credit file for seven years from the date released or ten years from the date filed. Unpaid or unreleased tax liens remain on your credit file for ten years from the file date.
- BillLv 77 years ago
No FHA has increased their lending requirements. You do not get a co-signer for a home mortgage, you get a co-buyer and all income and credit scores are considered.
- 7 years ago
There are alot of factors to be considered here you have not mentioned a credit score closed,collections are not sole reasons for denial.
dont give up find a good LO!Source(s): Mortgage Professional California Licensed.
- LILLLv 77 years ago
You will have to pay all a closed accounts, charge off accounts and collection accounts BEFORE any lender will consider you.
- CarenLv 77 years ago
do not get a co-signer involved.
if you can't do this on your own do not do it.
look at your credit reports at annual credit report.com and pay collection items.
you can't get a mortgage with items in collections. not in any state.