Bad Credit Home Financing ?
Okay, here's my questions and ideas. Please poke holes into anything
that I didn't think out correctly.
I'm getting married April 2003 (...I gather some of you are poking
holes already..). The plan right now is for my fiance to move in with
me in January 2003. She is currently residing in an apartment. I am
in my first house. By the time we get married, I will have been in
the house for only a year. Since she and her two kids are moving in,
I really need to get a bigger house, but we're willing to wait until
after the marriage before we actually move into this new house. I
would like to sell the home myself (no agent) and want to purchase a
used, not brand new home.
Now that I've explained the situation above, let me tell you the plan
that I've come up with so far and see what you guys think:
* Instead of her moving into my house with me, wouldn't it be a better
idea for me to move in with her and we just extend her apt leasing
agreement? I'm asking that because wouldn't it be difficult to sell
my current home if I'm still residing in it. Wouldn't it become a
huge nuisance to me and my family to live in a house and constantly be
asked to leave whenever it's being shown to a prospective buyer?
Shouldn't a house being sold be completely empty or is having all of
my furniture and things in the house a good thing? Of course, I'm
also worried about the timing of selling this house and getting a new
house around the same time period.
* Since my fiance has bad credit, I'm guessing that her credit would
drag down my credit rating, so I'm guessing that I would apply for a
mortgage loan for my new home BEFORE we get married. If we start
living together BEFORE the marriage and she supplies me money,
couldn't I report the money she gives me as "Additional source of
income" on the application which would hopefully help get me (us)
approved for a higher mortgage amount. For my current home, I could
only get approved for $130k. My debt to income ratio is not that
great. My fiance knows that her credit would hurt us when buying a
new house and has no problem with the things I'm mentioning in this
paragraph. I don't know if I'll be able to do the same routine if
we're already married. Again, I'm trying to come up with a way to do
this which would include her good salary, but not her bad credit (chp
7 - bankruptcy 2 yrs ago).
* My loan is a FHA assumable loan. Of course, if I sell it that way,
the person must qualify for the loan. When I sell the home, I want my
name completely off the mortgage. Here's my question though. Does my
selling the home FHA assumable make it more attractive to the
homebuying public or would it only really be attractive if it was
non-qualifying? Also, with me selling it this way, does it make it
easier for me to sell the house without having to get an agent? With
a wedding coming up, of course, I would like to avoid the 6%
commission if possible. I spoke to two other people who did FSBO and
they said that it was a total nightmare and if they had to do it over,
they would have hired an agent. I'm just wondering if offering a FHA
assumable makes life easier for me or not.
* Any book recommendations????
Thanks everyone. I'm asking you guys all of these questions because
my fiance says that I'm aggravating her and I should be focusing on
our marriage, not all this future home stuff. Maybe your answers will
help me relax a little
That won't really work. They would want to know the source of said
income and whether it is steady income, i.e., they would want to run
your girlfriend's credit report. However: you may still be able to get
a mortgage loan despite her credit problems for more than you could
qualify for on your own. You'll just end up paying B-class interest rates
and B-class PMI unless it has been 3 years by the time you apply for the
loan (in which case you may be able to qualify for A- rates, which are
considerably better than B-class "loan shark" rates). Note that if it's
been 3 years since the bankruptcy, you may even qualify for FHA financing
(which is slightly better than A- rates) based on combined income. You
really need to talk to a mortgage banker.
Not really. It could help attract a class of buyer who might otherwise not
see your home, but in the end buyers will have already gone out and
qualified for their own financing, so the FHA assumable typically won't
do much for selling a home, especially at today's very low interest rates
for conforming loans (6.5% and less).