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jcgooch
New Poster
Cash: $ 0.45
Posts: 2
Joined: 04 Apr 2006
Location: Plano, TX
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| Need Advice about Advice! |
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I am in a situation and would like some general advice on how to proceed. Long story short is that about 4 years ago, my wife and I got into a house and mortgage that is turning out to be too much. While I've been able to make all my mortgage, tax, and homeowner's insurance payments, other debts I possess have not fared so well. I plan on obtaining my credit report, but I believe my credit rating is probably not so good (I was turned down on a refinance 2 years ago because of 1 slow-pay item, I was informed). I probably have many slow-pay incidents reported since then, ranging anywhere from 30 to 90 days, primarily on credit cards, but also on a couple of medical bills.
So, we've decided to get out of our current house, which is basically causing is to live paycheck-to-paycheck. My worry, however, is that due to my probably poor credit rating, I won't be able to get into another mortage, even if it is a smaller one. I was hoping I could get with some sort of financial planner/adviser who could help me out of this Catch-22 of sorts. However, I'm not finding a lot of good advice on how to obtain the services of someone who could help me in this situation. There are plenty to be found in various specialty areas (Tax, Estate Planning, Investing, etc.), but I'm not sure where to go for this sort of help.
My ultimate desire is to get into a smaller house with a smaller mortgage, where I will have financial room to work off my other debt and finally start doing smart things, like estate planning, college savings for my youngling, etc. I am not interested in shady "credit repair" schemes or anything of the sort. But I don't know how to get out of one mortgage and into another, if my credit rating is bad. I don't know that I have the ability to go many more years, if that's what it takes just to repair my credit rating over time enough to allow this.
Advice?
Thanks much! For reference, I live in the Plano, Texas area.
- John
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Tue Apr 04, 2006 2:53 pm |
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Rolo
Yo' Daddy
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Location: Colorado/Florida
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Given your articulation of your situation, I am not sure on what you need advice; it seems like you have a qualified understanding of your situation.
The only way to get a definite answer it to talk to a loan officer. Tell her your situation, even have a credit report/score handy. Shop around. (Don't apply, just ask the question thoroughly and you should get a thorough answer--you don't want a bunch of inquires dinging your score. I've gotten straightforward, honest answers most of the time doing this.)
Bottom line: you want to know what your options are--seek them out.
"Expect me when you see me."
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Wed Apr 05, 2006 3:10 am |
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Stock Mama
Full Member
Cash: $ 13.80
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Joined: 06 Apr 2006
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I think the first people I would talk to would be whatever bank you got the original mortgage from. Explain that your current financial situation won't support a house of that size and that you'd like to downsize, and what can they do for you? The mortgage officer there should be able to lay out your options for you. If you have a good record of paying the mortage payments, that should go in your favor, and if they question your credit card payments, point out the fact that a smaller mortgage payment will allow you to get on top of your other bills.
Or, if nothing else works, you could sell the house and rent a smaller place until you can get the other bills taken care of, get your credit rating under control, then buy again. It's not as tax advantageous and if course the money you pay doesn't go into the equity of a house.
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Fri Apr 07, 2006 4:33 am |
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No-Brainer
Senior Member
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Location: Oregon USA
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| Bank Credit is not the only way |
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If you can find someone with a smaller house and lots of equity that wants to trade up, you might be able to arrange owner financing and avoid the banks altogether.
There's a deal for every situation out there if you can just find it.
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Fri Apr 07, 2006 6:57 am |
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jcgooch
New Poster
Cash: $ 0.45
Posts: 2
Joined: 04 Apr 2006
Location: Plano, TX
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Thanks, everyone, for the good feedback and advice!
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Fri Apr 07, 2006 8:24 pm |
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Offshore-Wealth.com
Senior Member
Cash: $ 14.80
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Joined: 20 Jul 2005
Location: FREEDOMLAND
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| 00-DEBT |
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Interesting,
I am sorry to see anyone struggle, but you have gotten yourself between a rock and a hard place. Here is the issue, you need to address your credit issues first or you will not qualify for a mortgage on a smaller home, just as you didn't qualify for refinancing.
It is important to get your debt managed number one. Once you see how to reduce your debt, and check your credit, then you can plan to sell and move, but not until you know where you stand with credit issue. If you sold your house, and then found another, which is how it typically goes, what would happen if you could not qualify for new mortgage? You would be forced into a rental which also relies on good credit these days, unless you find a private and nieve owner.
My advice is to try and clean up your credit issues first, and you can do this yourself once you have all three reports, so you don't need credit repair companies. You can dispute anything that is not 100% accurate, and in most cases they will drop off if creditor does not respond in 30 days, so use your rights to erase negative credit is first strategy. Once you have that taken care of, then you can think about selling your home.
You may want to do a debt analysis next to see how to best manage your current debt. Once you get that under control, then you won't have to worry about being in the same position again. Always protect your credit first or things will get out of control quickly and it will be a long road back if you don't know what to do.
Good luck to all, Mike
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Fri Apr 07, 2006 11:51 pm |
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