Mortgage Moment - Credit

Michael Holigan: Today we're going to talk about that serious subject that's called credit. A number of people don't believe that they can get a home, but actually can, but they're worried about their credit problems that really are not a problem. Let's take a look at each one and what is acceptable.

First is slow pays. That means you have a thirty to sixty to ninety day slow pay on your credit bureaus. Now there's three credit bureaus. One may be showing them, all three may be showing them. But that shows that you've been late, that you signed a loan and you did not pay it on time. Explain why to your mortgage company. Write them letters explaining what happened. No "dog ate my checkbook" or I just didn't want to pay it. Explain to them what actually happened.

Next is bankruptcy. Do you have a bankruptcy in your past? A number of people don't believe they can get a home because of a bankruptcy. That's really not a problem. If you've had two years since your bankruptcy, you can probably qualify for a house if you've been paying everything else on time since that time.

Foreclosures. Do you have a house that went back in the past? A number of those people believe they can't get a house. After three years with a foreclosure, you normally can get a home as long as you've reestablished credit, you're paying everything on time.

Profit and loss accounts. They're also called P&L's, but what they're most commonly called is charge offs. That means you didn't pay somebody, whether it be a credit card, or a student loan, they've charged it off. They say it's uncollectible. Those have to be paid. The mortgage company's going to want that paid in every case. If you have it on when you go in and apply for the loan they're probably going to tell you that you have to pay it off before they're going to make you that loan. What can be done about it, as far as all the problems? One, reposition yourself. Sit down with the mortgage company and talk to them about what you need to do for your individual case. They only make money if you get a loan, so they're going to work with you, explain what happens, what you need to do. They're very nice. The only reason they're there is to give you a loan. B&C Paper mortgages may be a loan that you ought to take a look at also, if you have some very bad credit. Now that's not "A" paper, which most loans are, but it's the next grade down. And what that is is a little higher interest rate, sometimes a little more down payment, but it can get you into a new house right now. Be working on your credit, cleaning it up over the next twelve months and then after a year, try to refinance yourself back into "A" paper for the best type loans with the best interest rates.

No matter what happened to your credit, don't turn yourself down. Go in and talk with the lender. If they turn you down, go to the next lender. Find somebody that's going to work with you to get that new house that you want.

Episode 014 1995 - 96 Season

| Standard Trim | Driveway Oil Spots | Custom Trim | Instant Concrete | Christmas Decorating | Leveling Thermostat | Credit: What is Acceptable? | LIST |

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