Mortgage & bad credit
Question: My wife & I are starting the process of buying a home.
We are right for the size of loan we’ll want (around $60,000): we make about $50,000/yr combined, have saving, investments, will make 15-20% down on the home. Her credit is spotless; mine not so much: a couple collection agency account (I can take care of those) and a big one – a government debt that has been charged off (in 1996 I think). It has/had balance of $6700.
I know the debt won’t help, but any idea as to how much it might hinder things? Would a cosigner help (Dad’s a retired doctor)? We’ll seek a 15-20 yr mortgage.
Answer: This one probably isn’t as bad as the former. If it’s no longer collectable, it isn’t a liability. While payment/credit history is certainly a factor, the presence of current DEBT and OBLIGATIONS is going to be a bigger factor.
Oddly enough a cosigner may help with the bad history issues, but DOESN’T seem to if you’ve got a lot of current DEBT outstanding.
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