Question: Hello everyone. Just to give you a little detail about myself. I am 25 > years old. I accumlated some debt while I was in school and couldn’t > handle the payment anymore so I filed for bankruptcy back in June of > 2002. It has been almost 3 years now. Since then, I have been in a > stable job making around 60k a year. I am single with no kids. Here are > my expensive that I have which isn’t much. > 1. rent with utilites is 700 > 2. 10k student loan with a 180/month plan. > 3. Insurance 150/month
> Thats pretty much it. I have no car payment. Insurance isn’t that much. > I don’t have any credit card except a debit card from bank. Other than > that, thats it. I was wondering what are my chances of getting a house > loan? how much of a loan? what are my interest going to be? My FICO > score is like 580 or something. I have about 10k saved up. I have about > 12k in 401k investment. Other than that, thats pretty much it.
> Some other question:
> how would I improve my chances of getting a good home loan? I know > about opening a secure bank card, how do I go about doing that? what > company are good? and what company I should stay away from?
> Thats pretty much it. If I can get some advise, I would greatly > appreciate it. Thanks for reading.
Answer: Here’s some info coming straight from the horse’s mouth…..
I filed Ch. 7 in August 2003, and was discharged in Oct. 2003. I am like you, single, no kids. I am now home shopping since I have been approved for an 80/20 loan of $140,000 at a combined interest rate of 6.5%. What this means is that I am financing the first 80% at one rate, and a second mortgage of the remaining 20%. My payment will be $1050. This, on a $40k a year salary. Now, the one exception to my situation and yours is our credit scores. Mine, less than 2 years out of BK, are 692, 703, and 713, respectively. I have successfully disputed 8 of the 11 accounts I had included in my bankruptcy off my credit report. On 2 of the reports, I succussfully disputed the bankruptcy from the public records. Once the remaining 3 accounts are off those reports, one would not be able to tell that I had filed if they looked at those reports. Since we have a “moral authority” in here, I must add that all of my disputes were per the FCRA. If an item has *anything* wrong with it, you have the right to have it corrected or deleted from your report. USE THIS RIGHT!
I will also say that, in the 16 months since my discharge, I have established 7 positive credit card accounts, and 2 installment loans. The disputes of my report and these positive tradelines have taken my scores from just above 500 after I initially filed, to where you see them now.
As the other poster has pointed out, you should continue to rent for now. I would suggest taking some of your savings and opening a secured loan. For $20 in interest for the year on a $1K loan, it is worth the score boost on your report. You could also get a secured credit card to help build your scores. Trust me, once you do that, you will get many more. I have 3 cards now with $5K limits that all have a 0% interest rate through 2005. Not bad for my fresh start.
Stay positive. Read. Learn as much as you can about credit repair. Establish good accounts. Then you can sit on a nice rate mortgage.
Do yourself a favor. Visit www.creditboards.com to learn more on credit repair to put yourself in the best position for a mortgage.
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