If you will give me more information, I can give you some info that will be more meaningful, but in general here is some info:
The first thing I would try is FHA. When the sub-prime programs died, I started to learn the FannieMae/Freddie Mac programs that would help people like your self, but with fixed rates. For whatever reason, those have gone away, and now there is FHA. I have learned that even though there are "guidelines", there are no actual fixed rules. Like to a degree credit scores don't matter, but credit history matters. The reason I say "to a degree" is that even though you can get an FHA loan approved for their system, you still have to find an investor that will buy the loan.
Both Equity and assets do matter, the more of both the more likelihood there is that Debt to Income problems can be eliminated. I have gotten approvals as high as 48%.
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Then, depending on if you get denied for those programs, the next thing to try is FannieMae/Freddie Mac type programs. They are very similar, but Freddie Mac is easier to get an approval if your assets/equity in your home aren't high enough.
Rates are a bit higher with those programs, but they have less in closing costs than FHA loans. If the CC debt is old and less than 5K, you may not be forced into paying those off.
So, yes, probably you can get out of your problem-and be in a fixed rate.
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Remember, once you have gotten your refinance, if you have decided to pay off your CC's, for 6 months to a year your scores will go down. This is because you are taking bad/negagive tradelines with old DLA (Date of last activity) and now they will be bad tradelines with recent DLA. Time heals all as far as credit scores go, a 4 year old bad tradeline that has not been paid off will count more against you than one that has been paid off.
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The general idea behind credit scores is that they are the estimation of the bureaus for the following:
What is the chance that this person will have a 90 day late in the next 24 months. That is all it means. So, if you have never been late-and you have a long history of credit, you will have a high score. If you are the same type bill payer, but short credit history, you will have a lower score. If you currently are late on your bills you will have a really low score. If you were late 4 years ago (my situation) your scores will be going up every month.
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Hope that helps. I would be glad to give you more information if you will provide the following information:
What is the approx value of your home and how much would the total new loan be for (that way I would know what your LTV (Loan to Value) is) Very important.
What assets do you have? 401K, money in the bank, etc.
You say that you have low FICO scores. What are they? Where did you get them? It matters where you got them because the more relevant scores are obtained from a mortgage person, second best from "MyFico", then the ones you get from the internet. Those are sort of going to be informative because you have owned your own home, but not as helpful as if you got them from the first of two sources.
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From my personal experience it sounds like you are close to the bottom of your difficult times and things will just get better from here on out.
Best Regards,
Charles
Quote:
Originally Posted by no1healey
Loan doctor...Are there any loans with equity but very poor fico scores..Refi would pay off all neg's and be less than pmts are now...First & second into one loan..paying off negs..neg's are charged off cc debt....Fico will come up wo negs..long term residence.
How close to appraised value will they go?
Yes this senario is why we are in melt down today...lol
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