First-Time mortage w/ credit issues
Question: My wife and I were considering purchasing our first home. We wanted >to get a pre-approval from a lender before looking. When we spoke to >one particular lender, this woman told me that my wife’s credir report >was terrible, and that we would not be able to get a mortage with this >lender. I obtained copies of our credit reports. My wife had >financial problems years ago, and had several credit card charge-offs. >However, the last couple of years, she has had a clean slate, and has >been a joint borrower with me on a couple of loans. >My question is this: If I pay off her 3 charge-off balances, will we >be able to get a descent mortgage with less than 20% down? We have >decent income. Any opinions would be appreciated.
Answer: If she has good credit for the past twenty-four months and if you pay the charge-offs and if her bad credit DOES NOT include mortgage problems, you should be OK. Putting 20% down cures many ills.
Don’t be surprised if banks don’t want to do this deal. Find a good, reputable mortgage company (broker) to do it. A broker has many different options, while a bank has only its own programs and its own underwriters.
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