CrazyForCredit Posted January 6, 2008 Report Share Posted January 6, 2008 Good evening.I applied for and received a mortgage about three years ago. I'm thinking about selling my current house in the spring, and buying a different one. Financially, it would be better to wait a year or two, but I have good reasons for selling that would take too long to go into...... anyway, as far as getting a new mortgage, there are a few potential problems. First, I won't have a lot of cash on hand when I put the house up for sale. I'm pretty much depending on my equity (10%) to supply the down payment on the next house. Second, I have a couple of paid collection accounts that will drop off the credit report in June 2008 - in this climate, will that hurt my chances of getting a new loan? Finally, I have a credit card balance I'm slowly chipping away at. There's only about $1200 left, but I want to keep as much money in the bank as possible while I decide whether or not to sell [the credit card company is not charging me interest at the moment due to a special deal]. Will that fact that I have a credit card balance reduce my chances of getting a loan?Other than the paid collection accounts, my credit is great. Link to comment Share on other sites More sharing options...
YoUrFrIeNdMiKe Posted January 6, 2008 Report Share Posted January 6, 2008 are houses selling where you are at? in some markets (like mine Fla) sellers, in order to sell are taking much less than they are asking and their asking price is much lower than what they paid/appraised value. the truth is, there really are no buyers, contrary to what the banks or realtors may say. if you need to get out go for it. the house values i will assume? will be lower when you go to buy if you can wait till that collection stuff drops off. maybe better to wait and let it drop off than to try and rush it possibly opening up a new can of worms. if your market is declining it may not be a bad idea to sell/rent for awhile and save/buy in the future with more savings and a more home for the money situation if it is feasible in your situation. best of luck. Link to comment Share on other sites More sharing options...
CrazyForCredit Posted January 6, 2008 Author Report Share Posted January 6, 2008 I think houses are selling where I am, but I don't expect to make a profit after the real estate agent takes his/her cut. I certainly wouldn't take less than the break-even amount. I don't have to "get out" now, but if I'm going to sell, spring is a good time. Link to comment Share on other sites More sharing options...
morrow Posted January 8, 2008 Report Share Posted January 8, 2008 Good evening.I applied for and received a mortgage about three years ago. I'm thinking about selling my current house in the spring, and buying a different one. Financially, it would be better to wait a year or two, but I have good reasons for selling that would take too long to go into...... anyway, as far as getting a new mortgage, there are a few potential problems. First, I won't have a lot of cash on hand when I put the house up for sale. I'm pretty much depending on my equity (10%) to supply the down payment on the next house. Second, I have a couple of paid collection accounts that will drop off the credit report in June 2008 - in this climate, will that hurt my chances of getting a new loan? Finally, I have a credit card balance I'm slowly chipping away at. There's only about $1200 left, but I want to keep as much money in the bank as possible while I decide whether or not to sell [the credit card company is not charging me interest at the moment due to a special deal]. Will that fact that I have a credit card balance reduce my chances of getting a loan?Other than the paid collection accounts, my credit is great.10% down would be great. But believe it or not, there are still programs out there that will go 97-100% I only wish every buyer came in with that, so I think you are on the right track.As far as the collections go, as long as they are paid, I wouldnt worry about them. Do you know what your scores are? What is the limit on your cc? Is the utilization under 50%? Either way keep hammering away at it. But if its close to being maxed out, you can always ask for a CLI to balance out the utilization-but find out if they do a hard or soft pull on your CR before you do. Hope that helps.~Kim Link to comment Share on other sites More sharing options...
Hedwig Posted January 14, 2008 Report Share Posted January 14, 2008 If the collections are that old and paid, they shouldn't hurt you.As Kim mentioned, you need to look at the ratio on your card. However, even if you have a high utilization on that card, if you overall utilization is low you may be OK. Most mortgages go through a manual underwriting process, which means there is a chance to explain negatives. If you explain that you are not paying interest and that is why you are not paying it off very quickly, it may not hurt you much.I'd be more concerned about how much you'll get for your house and if you have enough for the closing on both sides (selling and buying).Make sure you do a through analysis to see if selling right now is really the smart thing to do. Link to comment Share on other sites More sharing options...
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