Bankruptcy History/Requesting Credit

[jude11142]

What is the name of your state? Connecticut
I have a house that my father inlaw quitclaimed to me last yr. There is no mortgage(pd off yrs ago). I pay taxes etc.....I do not have good credit due to...yawn....divorce, bad investments....and so on. I declared bankruptcy and it was granted 3 yrs ago. Since then, I have been working hard to rebuild my credit. I did get financed for a new car this past December and have made all payments on time. The house needs major repairs, new roof, windows for starters. I applied at a major bank for a home improvement line of credit and was declined. The letter stated the reason, "poor risk"......My question is "Are mortgage companies, like the ones you see advertised on T.V. risky?" "Besides, I'm sure, higher rates are there any catches involved?" I was under the impression that since my house has no mortgage, I wouldn't of had any problem getting a loan. I am not looking for a huge loan, I figured on 50,000 max, since I got an estimate for the roof(17,000), windows(10,000) and the rest for minor repairs. The house alone is valued at 325,000(based on estimate from last yr)and the property worth about the same. Another option, my father inlaw was offered 250,000 2 yrs ago, when a new devopment of housing was being built. There are approx 20 raised ranches up now and there is still building going on. So, maybe I can approach them and see if they are still interested in the property. Ofcourse, I would lose some of the privacy that makes this house special.
Why is it so hard to get a loan when I have more equity than what I am asking for? If turned down from one bank, will others automatically turn me down? I also have a credit union, not sure if they offer home equity loans, but I will look into it this week.
Any suggestions?

Thank You,
JUDE

 

[rainmand]

>Why is it so hard to get a loan when I have more equity than what I am asking for?

Because so far you've only explored a bank and banks have fewer loan products and stricter guidelines.

>If turned down from one bank, will others automatically turn me down?

>No.

I also have a credit union, not sure if they offer home equity loans, but I will look into it this week.

>Credit Unions are similar to banks in this area. Many Lender's would love to have a borrower like you. Many banks and credit unions prefer to play it safe and would like you to spend four years rebuilding your credit and proving yourself financially sound again. However, there are a lot of Lender's that don't have the same requirements and will offer you a reasonable loan based on your criteria.

 

[alent1234]

Don't know all about the companies on TV, but I'm pretty sure that Ditech is owned by GM Acceptance Corporation. The financing arm of GM. They make more money on the finance part of the company than the car part.

 

[amortgageman]

Jude,

If you have had no further deraogatory accounts since your bankruptcy, and you have reestablished credit, there should be no problems credit wise in obtaining a very decent loan.

Of course there are other factors that go into getting a mortgage approval, such as employment history, and rental history in addition to a credit approval.

Also, have you examined all three credit reports recently, and do you know where you stand "score wise" to obtaining a mortgage?

 

[jude11142]

Thank You for info

CT
Thanks to those who read and answered my post. My employment history is stable, I'm a nurse and though I've only been at my job going on 3yrs, prior to that I have worked at the same job for over 12yrs. Also, prior to getting this house, I rented for 9yrs and would have no problem getting an excellent reference from my prior landlady. Back in 83, when I was married, we purchased a home which was in both of our names and thank God, got out of it before things went to you know where. I would think that should count for something. The bad credit is all the credit card debt that incurred throughtout my separation and divorce. Though, our divorce decree holds me not liable for most of the debt, the credit card companies are not acquired to obey the court orders. So, that is one of the major reasons, I decided to go bankrupt, along with thousands in medical bills. Hopefully, I will find somebody that will give me a chance.

Thanks again for your suggestions and ideas. I deeply appreciate your input.

JUDE

 

[amortgageman]

Jude,

With the exception of proving a recent rental history (because you live in the home and there is no mortgage), you should be in fair shape to getting a mortgage as a refinance. You are not asking for a high loan to value, so therre are many lenders who will lend on that scenario.

As far as the big TV advertisers go (who ultimately pays for those ads?), I would probably steer clear. Some of them go right up to the point just below predatory lending, and have created nightmare situations for homeowners.

Ask a few good friends who they may recommend and use a good mortgage broker.

One other question first, have you checked your credit reporrts since the bankruptcy? You may want to do this, just in case (most likely) there are errors. You will want to pull all three bureaus independently, and not a "three in one" report. Also pay the little extra to get your credit score on each bureau. By doing this extra step BEFORE applying for a mortgage, you can possibly save quite a bit if there are errors that could be hlding down your credit score.

Will be standing by in here, if you have any other questions you need answered concerning the mortgage or credit.

The three main credit bureaus are Trans Union, Equifax, and Experian.

 

[BriantheBanker]

facts

Here are a few issues standing between you and a loan:
Q1.The house needs major repairs, new roof, windows for starters.
BANKS HATE STRUCTURAL problems. Structural items need to be appraised with at least a 3 year remaining life. Need clean appraisal. (you may have told them too much.)

Q2.I applied at a major bank for a home improvement line of credit and was declined.
You DON'T FIT IN THE BOX. A major bank is great at cashing checks and traditional S&L activity; terrible at mortgages (it's not really (their) business.) You need a seasoned Mortgage Banker who is paid on your loan closing, not by the hour.

Q."My question is "Are mortgage companies, like the ones you see advertised on T.V. risky?" "
There is risk working with any company. There are professionals and 'not so professionals.' You need to make your decision based on the individual. Asking the right questions and being realistic will help guide you.

Q.Why is it so hard to get a loan when I have more equity than what I am asking for?
Banks want collateral. If you don't pay, how easy could the bank sell a house that needs 'major work?' Equity or not, the marketablity of the collateral is questionable.
You need a professional. I am not a mechanic. I would not rebuild my engine. Find a mortgage banker who can rebuild your request for a mortgage.

Q.If turned down from one bank, will others automatically turn me down?
Other S&L Banks and most mortgage companies will NOT approve the scenario you explained.
A skilled Mortgage Banker knows how to structure and get you approved. Find a Professional who can get the job done.

Q.I also have a credit union, not sure if they offer home equity loans...
They may- credit unions are S&L in nature. You don't fit in the box.

Good luck,

BriantheBanker
Lending more than money!