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| I will admit it. My credit rating is bad. not the worst, but not very good, either. My question is, can a big enough downpayment help overcome any of the damage a bad credit score causes? and, does any place (FHA, Credit Unions, etc) look at the situation instead of just the score? I've lived in the same place for 12 yeaRs, been paying on my mortgage for 4 years (a few times 30 days late about a year ago because of hubby's job difficulties) and have worked the same job for 8 years. And I just received a $4000 year raise. does any of this make any difference in light of the two 30 days late payment on my present mortgage? we are trying to sell our house to buy another house, but can't get preapproved for financing because of this credit score.
I realize we have screwed up, but should I give up all hope for the next few years? |
Follow-Up Postings:
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- Posted by dave_donhoff (dwdonhoff@hotmail.com) on Fri, Sep 5, 08 at 16:21
| Hi Mary, YES, a big enough down payment DOES make a difference. There are loan programs where, if you have at least 30-35% down, they will approve regardless of recent late payments. You just need your loan pro to look for these, is all. We're doing a LOT of these recently. Luck! |
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- Posted by happymary45 (My Page) on Fri, Sep 5, 08 at 16:49
| thanks Dave. But how about the interest rate? |
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- Posted by dave_donhoff (dwdonhoff@hotmail.com) on Fri, Sep 5, 08 at 18:38
| The rates on loans that ignore credit lates reflect that higher degree of risk to the lender, but despite that the payments are usually equal or lower for the same purchase price since the balances are lower. Once your late payments season far enough into your history, you can do a streamline refinance, OR a cashout refinance to recover some or all of the funds you put in as down payment to return to your investments. Worrying about 1-2% in interest rate, in the current lifetime low rate environment *AND* the current depressed purchase price environment... is kind of like worrying about the bandleader's rhythm on the Titanic. You've got opportunity at a level that may not come again in our lifetime, and the ugliest interest rates today are lower than the prettiest interest rates 20 years ago. Keep everything in perspective, and go for it! Cheers, |
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