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xshanny02 · Joined: 19 May 2008 Posts: 2 2.06 Dollars($)

I am currently in a private mortgage at a 13% interest rate. I am not getting unbiased answers here in my area, due to many people knowing the "people" that I have my private mortgage through. I am running on over 2 years of paying this interest and I am not able to refinance with a conventional loan. Can anyone help with me figuring out what to do and what, if any, rights or protections I have. The people have been very good to me, but I am starting to become more in debt and getting into more trouble. Any help would do. Thank you

JuanHdez · Posted: Mon May 19, 2008 7:45 am Post subject:

xshanny. Is this a second mortgage that you have on the home? if so, rates on these 2nd mortgages are typically higher. I am interested in knowing why you are not able to qualify for a conventional loan. Government loans such as an FHA loan are currently much more flexible with financing in regards to Loan-to-Value and Credit Score. I recomment you speak with a loan professional who would be able to get all of your specific details in oder to find out what is available to you.

J Very Happy

gmakerley · Posted: Mon May 19, 2008 1:59 pm Post subject:

shanny, what you need to provide to us (in order for us to give you reasonable and reasoned advice) is more information concerning the mortgage you have - the balance, the terms, etc. furthermore, we'd need to know the approximate value of your home.

from the post, it would seem like a rather straightforward matter for you to obtain a new loan to refinance, but it seems there may be more there than meets the eye.

give us some more information and we can give you some sensible advice.

xshanny02 · Joined: 19 May 2008 Posts: 2 2.06 Dollars($)

It is my first loan, to purchase my house. I pretty much got myself in too deep, and I am learning that now, but I am young, and tend to learn things the hard way (as my dad use to say). I filed bankruptcy in 2005, and came to an "opportunity" to buy a house, and would be able to refinance after a year, so I was told. So I took the private mortgage for approx. 62,000, 55,000 was the price of the house and then 6,000 covered all closing costs, plus I received like 2,000 back in cash, so I immediately put that into the house. Now I owe about 59,000. I believe it is based on 30 years, at a rate of 13%, but I have to pay off or refinance within 3 years, which I am coming up on. I was told that I would of been able to refinance with subprime, with my current credit score of like 550, but due to the recent "housing crisis" I have not been able to. I have done fairly well paying the 715.00 a month, I just wish I could bring it down so that I could actually live, instead of just paying a mortgage, plus my taxes and insurance are not included, and my insurance is paid, but I have fallen behind on my taxes. I have not had my house officially appraised, but I live in a good area and the houses around me have sold for a lot more than what mine has, and I have put a little work into it. I really don't know, and am really getting backed into a corner. I'am really getting in too deep and have seriously considered contacting the lender and signing the deed back to her in lieu of foreclosure, since my "mortgage" is not reported to a credit agency, its not even reported that I own a home. I don't even know if this is even legal...or what I have gotten myself into.

JuanHdez · Posted: Mon May 19, 2008 2:39 pm Post subject:

Well Xshanny.

I believe you were able to get a great deal given the credit score and the difficulty of finding a private lender for the financing. It can be very hard to find someone to give a private loan even when it's a second mortgage. Anyhow, as to the legalisms of the loan, you would need to contact a real estate attorney.

FHA loans, at least in my state, are very flexible with credit scores. They are available to borrowers with a credit score as low as 580. I think you should also consult with an experienced loan officer who can help you inprove the score. It is not unusual to raise the score 30points or more in a matter of months. In fact, I was able to help my brother in law raise his credit score from the 570's to 689 in about 9 months.

Best o' Luck

J Smile

gmakerley · Posted: Tue May 20, 2008 10:58 am Post subject:

shanny you're right - this is not a pretty picture. as juan said, you'll likely have a shot at a refinance if your credit score has improved to 580 or more (preferably higher, of course). i guess the key question is if you've improved your score since you purchased the house. you may not know your own score, but you will know how you've paid other bills that affect your overall credit.

jameshogg

Hi Xshanny,

I am a bit surpised because you got the mortgage within a short time of filing the bankruptcy. I think you were a bit lucky in this regard. Anyway, now that you're getting into too much of debt, a good refinance deal can be helpful for you. Like george said, you may use someone else's credit in order to qualify for a refinance, if the person is willing to be a cosigner on the loan. But in that case you still need to make regular payments.

You said you've done well paying the monthly installments fairly well, so I think you have been quite regular in making payments. In such a case, an FHA loan can be one of your options, provided you can raise your score within a few months or get someone to cosign with you.

Since you haven't stated what type of refinance loan you're looking for, and your credit score isn't good enough, therefore I suggest you get a free consultation from lenders in this community. The lenders may even help you raise your score apart from suggesting what loan option can be the best for you.

Thanks

gmakerley · Posted: Wed May 21, 2008 10:04 am Post subject:

hold on a minute, james...when did i say he could rely on someone else's credit????? are you reading between the lines?

other than that, i don't disagree with your contention that an fha loan is a possibility, especially with a cosigner, if one can be found.

brad · Posted: Wed May 21, 2008 10:51 am Post subject:

Good Afternoon,

I think you might want to sit down with a credit counselor or a loan officer and take a good look at your credit there may be a way to get that score to where it needs to be. IF your BK was 3 years ago you should have much better credit now if you have established new trade lines

kpatrick · Posted: Wed May 21, 2008 1:32 pm Post subject:

Just a quick note on cosigners...in the past a cosigner would help you qualify if it is a debt ratio issue, but not with a credit issue.

But as of last week, FHA stopped allowing non-occupant co-borrowers income being computed in the ratios.

I agree with James that FHA may be your best bet...

chrisburns · Posted: Thu May 22, 2008 6:41 pm Post subject:

assuming you can fully document your income and work history for the last two years FHA is your best option. You may not need anyone else to help you qualify.

Depending on your state there are still some lenders following the actual FHA guidelines that don't require a 580 or higher minimum credit score.

I suggest calling around and asking about an FHA loan for yourself to get out of that train wreck of a mortgage your in now.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

I agree with Chris that you should check into FHA first before turning over the deed. Also keep in mind that even though your mortgage does not report on your credit report that a foreclosure will. The county will report it to the credit report as a public record.

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