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Okay this is a bit involved but I'll try anyway ... I I own 2 homes, one in Nevada and one in Missouri. I am trying to refinance at least one of the homes as they have high interest rates, (I'd love to refi both of them), and am having a really tough time finding someone to help me. We have a lot of equity in one house, and some equity in the other. If the real estate market was better I would try and sell the Nevada home but it is crap so I am trying to hold onto it until it is better.

I work as an independent contractor and do not make much money and my husband does not work but is starting a job in 2 weeks (he has been interning and will now be paid). I am renting out the Nevada home to my brother and a friend, we live in the Missouri house.

Nevada Home- worth about $600,000, currently have a loan with Accredited Home loans for $152,894.92 @8.125% interest. The 2 year pre-payment penalty has passed. 2 years ago I was 120 days late but have not been late since then.

Missouri Home- worth about $120,000, currently have a loan with Wells Fargo for $70,805.06 @ 10.25% interest. There is a prepayment penalty, I took the loan out 1 year ago but feel it is better to pay that penalty if I can get a lower interest rate. I have never been late.

I have a couple of credit cards, haven't been late but keep them at a high/maxed out balance. My Chase card has a $7,500 limit, 28.99% interest. My Capital 1 card has a $750 limit, 15.90% interest. My Discover card has $700 limit, 15.99% interest. My Sears card has $250 limit, 22.15% interest.

I have 2 recent collections on my account that I am disputing from a book club I have no knowledge of. Other than those, I have nothing adverse on my reports. My credit scores as of Monday are 602, 611 and 636.

The Mortgage Broker I have been trying to work with says I have to bring my scores up to 700 because for the lower scores there just isn't anything out there available.

Does that sound right, or should I try ANOTHER broker?

We desperately need a second and much more gas economical car, so we either need cash out to buy the car, or we need to get a car loan as well.

Is there ANY hope for us soon? It will be a few months before the credit score goes up with the RJM Collections coming off soon I hope, and we need help now as we owe money for car repairs, vet bills, my sister, my brother and my kids, as well as some other things.

Posted: Wed Jun 11, 2008 3:32 pm Subject:

Can't comment on the refi, but...

On the cards: You need to get those balances down ASAP. That's killing your debt-to-available-credit ratio, which is key to your score. Either paying down the balances or getting additional available credit [which you would not charge up, so it remains available credit] would help your ratio here.

On the book club collections: Those are killers, score-wise. Deal with them as soon as you can. What have you done about them so far?

On the second car, what are you looking to buy? You don't need a brand new one, ya know. A sub-$1000.00 beater would get hubby back and forth to work for a few months or more. And you likely wouldn't need to go deeper in debt to get it. Look for one for sale by an individual, and have it checked over by a mechanic before you buy it. I'm on my fourth year driving a '93 Plymouth Voyager I bought for $900. I have less than $1,500 invested, including all repairs since I've owned it.

Posted: Wed Jun 11, 2008 3:33 pm Subject:

Also... You said you were trying to get your score up to a 700. Where are you now?

Posted: Fri Jun 13, 2008 2:27 pm Subject:

Thanks for the responses, I'll answer your questions as I can ...

I know I have to pay down my debt, but what I am making is just b-a-r-e-l-y (actually not quite) paying our bills and I am always a bit behind. We turned off our cable, internet, etc, don't go out to eat ever, grow our own vegetables, have our own chickens for eggs, don't drink or smoke or go to the movies, don't buy clothes, basically everything I make goes to pay our mortgages, gas (which is really hurting us now), food and utilities. When my husband starts bringing home a paycheck it will be possible to start paying down the cards, one at a time.

I'm afraid to ask any of the credit cards for additional credit as I don't want to be turned down while getting another strike against my credit. But yes that would be an ideal solution.

My scores are 602, 611 and 636 from what the report the mortgage broker sent me says.

I sent debt verrification letters to the company, one letter for each account.

On a car, we just need SOMETHING, but again have no money to buy one. A $200 payment is easier to come up with than a $1,000 lump sum, but it would drop us in bigger trouble financially.

Agggghhhhh what to do? I always say I want to win the lottery but I don't buy lottery tickets!

Guest · Posted: Sun Jun 22, 2008 7:10 pm Subject:

How much debt do you have to the income you make? The NV home may be a problem with lower scores byt the one you live in may be doable if the debt to income is low enough.

Even with the scores you have. Once your husband gets the new job it should be easier. Because he has been in training/school for it you can count it (2 yrs total needed for training)

The NV home will require a higher score because it is a non owner but the loan to value is very low.... I know the market out there stinks right now but that is a whole lot of money you could probably use if you sell. You would probabl;y do better investing into some lower priced homes near you and renting them out creating a positive cash flow situation... it would take being landlords but may be worth it?

Brian

Posted: Tue Jun 24, 2008 1:26 pm Subject:

Between our 5 cards we owe about $11,700 which is just about at their credit limits.

I bring home $800 every 2 weeks.

The NV mortgage is basically paid for by rent paid on it, but then there is the taxes and insurance which puts me about $250 a month into the hole on that house.

The MO mortgage is easier to deal with as it's "small", but it takes a bit more than 1/2 of my monthly pay for the mortgage, taxes and insurance. The water and electric are another $100 or so a month.

So as you see, I have about $450 to spend on gas, food and car insurance, and I almost spend all of that just on gas so we are really getting into a dire position at this point.

We both commute 20 miles each way in the same car but it is a gas guzzler but like I said can't get into another car until we have something to pay for it with, hence needing a loan of SOME sort.

We have no other debt other than owing about $1,000 to our vet, feed store and mechanic.

Can you please explain what you mean about "counting" his training time? Are you saying that some loan companies will give us some leeway on my husbands work history?

I would never be a landlord if it wasn't my brother and friend, it is not a headache at all axcept for financially. That property was supposed to be our nest egg but if the market was any better I would sell, we might decide to put it on the market now anyway just to see what happens.

Thank you all for the help provided so far, please any more would be really appreciated.

Posted: Tue Jun 24, 2008 2:11 pm Subject:

Sounds like your debt-to-income ratio is what is really hurting your scores. Also, the MO mortgage @10.25% is ridiculously high.

Any chance you could borrow the money from family to get your CC down. This would help your scores at which time you should be able to refinance and pay them back. Just an idea.

I understand the struggle of living paycheck-to-paycheck. Hopefully your husband will be re-employed soon.

Posted: Tue Jun 24, 2008 2:34 pm Subject:

yeah the 10.25% loan was a last ditch effort last year that was supposed to pay off all of our debts and put us back on track (which it kinda did), but without him working to cover that new bill, it just spiraled us out of control again.

I wonder if calling Accredited and Wells Fargo about refinancing those loans would be an option? Do loan companies do that sort of thing, or once they have it do they not care?

Posted: Tue Jun 24, 2008 3:00 pm Subject:

I think that since you already have loans with them, they may not be super likely to want to refinance. However, on the other hand, if you haven't ever been late and they want to keep you as a customer, you might be able to tell them that unless they can do something for you, then you will have to shop around and find someone else who can.

Also, in regards to the earlier posts about asking your current credit cards about a higher credit limit, you said that you didn't want to have them ding your credit further. Someone correct me if I'm wrong, but I think if it's a current creditor, it shouldn't show as an inquiry or "ding" on your credit report. Your current creditors can run your credit report anytime they want to anyway, and it doesn't show as an inquiry. I think it would only be if you applied for a new line of credit with a new company that it would show as an inquiry on your CR.

Posted: Wed Jun 25, 2008 6:48 am Subject:

If her current creditors pulled her CR, then it would be a soft inquiry, usually shows up under "inquiries not seen by others." The code AR will be next to the inquiry, which means account review. Usually these do not count against you.

There are 2 main issues to focus on for her: one is to get her debt to income down, which can be done by paying down her credit card debt to around 30% of her credit limit. This should quickly improve her scores. The second, is when her husband has a job, include his income in the mortgage application.

Posted: Thu Jun 26, 2008 9:05 am Subject:

how long does he have to be working to be able to include his income?

I had tried around Christmastime last year to "upgrade" my Sears card to a Sears Visa, they denied me, and it shows on my credit report in the "may impact your credit score" column. The request that I made to increase the credit line a couple of months later does not show anywhere.

Posted: Thu Jun 26, 2008 9:47 am Subject:

The credit line increase request probably doesn't show because it was just a request to an existing creditor on an existing account. The upgrade request probably shows because you were actually requesting to open a new (different) line of credit.

Posted: Thu Jun 26, 2008 9:49 am Subject:

I'm not sure how long he would have to be working to include his income, but most mortgage companies want to see your last two paystubs when you apply for a loan. However, instead of that, they could just send an employment verification form to his HR department. It would probably depend on the lender and their specific requirements.

Posted: Thu Jun 26, 2008 9:59 am Subject:

I am an independent contractor so I had to send my tax returns for the past 2 years, and he had no income then. Would they possibly "figure" it in now that he is working?

Posted: Thu Jun 26, 2008 11:23 am Subject:

More than likely they will consider his income.

Posted: Thu Jun 26, 2008 11:31 am Subject:

Yes, now that he is working, you should be able to get his income added to your application. Call your mortgage broker and ask what documentation you will need to submit and how long your husband will need to be at his job. Also, you might ask whether with your higher income now, you might be able to get a loan without having to first bring your credit score up to 700 (although it is hard to get loans with lower credit scores now, so it may be that there just isn't anything available).

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