Zillow Advice: Credit Scores/Bad Credit - 46% underwater & spouse making far less $ now. Should we walk if home is in my spouse's name only?

Okay, well that's great then. ...

Sun, 05 Jul 2009 22:43:00 GMT

Okay, well that's great then. Very little to no debt is key. But make sure you use your cards, even just a little bit - it's shows responsible spending and will build your credit rapidly - but you have to use them - just don't charge more than 25% of the limit and don't pay them in full each month. Say you charge $50.00 one month - when the bill comes in pay half of it and then the next month pay the rest. If you pay it in full each month you're not really helping your credit - trust me, this is a lesson I learned. Make sure you get the 2005 havoc cleared up too. And don't go out and get any new credit or apply for any new credit.

I have no current debt or ...

Sun, 05 Jul 2009 21:57:00 GMT

I have no current debt or car loans in my name. Everything is in my husband's name. I do have 4 open/active credit cards that have no balances and no lates ever on those. A major family event back in 2005 caused some havoc on my credit back then. I'm hoping that after the BK finally drops off my credit in December, I can apply for a mortgage then and I won't have to explain why I had new 2005 debt after a 2000 BK.

Btw Zewly, why do you have ...

Sun, 05 Jul 2009 21:25:00 GMT

Btw Zewly, why do you have old credit card debt from 2005 if you filed bankruptcy in 2000? Did you charge more debt that you subsequently haven't paid or is it something that wasn't included in the bankruptcy? Have you been paying your student loan or is that in default too? Your debt to income ratio is important too - your mortgage payment can't be more than 34% of your income and mortgage plus all other bills can't exceed 36%. Would you be able to qualify for a mortgage in your name only - would your income support that? The days of creative financing are gone. If you want to buy a house today you have to be prepared to explain everything and you have to be able to come to the table with money. Yes, it's invasive and sometimes humilitating but lenders aren't handing out mortgages to just anybody these days. Talk to a few lenders, be 100% honest with them, and see what they say. I myself am in escrow right now on a conventional mortgage with 20% down so I absolutely know what lenders are asking for these days.

Yes, I neurotically check ...

Sun, 05 Jul 2009 21:24:00 GMT

Yes, I neurotically check my reports and credit scores with online credit monitoring and myfico.com at least once a week. zag44, I appreciate your non-judgmental advice.

Hearing someone say that home prices will continue to decrease over the next two years is comforting if we are still looking (or if I'm pregnant) in a year. We live in Port St. Lucie, one of the hardest hit housing markets in the United States.

I would expect to see even ...

Sun, 05 Jul 2009 21:15:00 GMT

I would expect to see even better deals in a year or two than you do now. The economy continues to deteriorate and even if prices stabilize somewhat they certainly won't be going up. And, yes, with your credit score of only 640 you barely even qualify for a mortgage (you need at least a 620 to qualify) so you face major obstacles there too and the slightest shift in your credit score could make you even ineligible for a mortgage. Start rebuilding your credit, if you haven't already. Don't make any big purchases like a new car or charge a lot on credit cards. Never charge more than 25% of your limit on any credit card and make more than the minimum payment. Make sure you contact all 3 credit bureaus to have the bankruptcy removed as soon as it's eligible to be. Do some reading online as to how to raise your score - believe it or not you can actually raise it a lot in a short amount of time if you take the right approach.

I guess I kind of figured ...

Sun, 05 Jul 2009 20:34:00 GMT

I guess I kind of figured there would be no hope of a mortgage. I know we would be paying less per month with a mortgage (even with high interest) than we would be if we rented though. I wonder what kind of deals will still be around if we rent and wait a year or so to buy.

I think you should get out ...

Sun, 05 Jul 2009 20:15:00 GMT

I think you should get out there and at least start looking at some rentals and see what you find. I am guessing that in this current economy you would be able to find someone who will rent you and your 4 dogs a home - maybe offer up an extra deposit and/or give the landlord an opportunity to see how the dogs behave so they know the dogs won't be a nuisance.

I would really like to know ...

Sun, 05 Jul 2009 19:47:00 GMT

I would really like to know if there's any hope at all of obtaining a loan with my current credit situation. Renting may be difficult for us since we have 4 dogs. We think we can save $10K over 6 months to put down on a $85K home. My bankruptcy will come off my credit in 6 months. I've never bought a home before so I don't know.

Greg - She was very clear ...

Sun, 05 Jul 2009 18:45:00 GMT

Greg - She was very clear in her post that she and her husband cannot afford the mortgage. Having said that, I think the smartest thing to do is forget about buying another home right now, walk away from this one, start your family, and rent for a while while building your savings and your credit score. We all want what we can't have and sometimes you have to make some pretty big sacrifices. And your biological clock is ticking fast sweetie!

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Sun, 05 Jul 2009 17:52:00 GMT

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