Question by Daisy:
How to get a home loan and begin paying on bad debit?
My spouse and I are wanting to purchase a home. We pay our rent each month so we should be able to pay a home payment. We have some very bad credit issues in the past and would like to take care of them either by settling or paying the debt off slowly. But how does one go about this? I know I can get a government loan if I begin paying on the bad debt, but companies want lump sums and dont want to work with us. They demand payment now and dont’ care otherwise. Any suggestions?


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Answer by Bill P
So you wantr to GET A LOAN TO PAY A DEBT? Isnt that what a loan is? a debt. Depending on the debt, you can send them payments. They will send you a cash pay offer for a lower amount eventually but they will want cash as you said. Just tell them you can pay $xxx monthly. If the debt is a medical. it wont count a lot on your home loan unless it is a massive amount.

Answer by chrime t
There are hundreds if not thousands of websites on the world wide web enumerating the ways to apply and receive home loan when you are plagued with bad credit issues. These sites help consumers with bad credit scores to increase the viability of their existing credit scores and set up loans regardless of their credit history.Companies that specialize in bad credit home loans; usually offer a wide range of options for consumers with bad creditBad credit hasn’t stopped them from purchasing a home. There are several programs available for people with bad credit that helps to restore their credit status and to live debt free lives.

Answer by Mountain Bear
I’ve worked hard to have excellent credit on a very low, low income.

Get yourself out of debt before you get into a home or you are likely to just have more and more debt.

One, if you are trying to work with creditors and they refuse to work with you, take their phone calls so you can show that in court. Refuse to speak to them unless they grant you to take the call. There are new laws that state that any reasonsable offer to work on reducing your debt, must be accepted. Working with a state bureau for credit reduction is best. Go on the web for your state and look up: Say Assisted Debt Reduction. DO NOT, DO NOT pay some company to help you. If you go with a state one, the fee per months is like usually 12 to 20 dollars. All that does is pay the person who does all the work for you. They charge you one fee per month for all your debt. They then get each creditor to concur to not add any more interest, to accept so much on the dollar. Most will attempt to get your debt down to where it will not take mroe then two years to pay it off. Doing this also saves your credit rating and actually as you pay on time it ups your score. I had a friend who had 1,000 in outstanding debt. She was charged through the state bureau 100 per month, and only 12 of htat was a fee, the remaining 88 dollars went to paying off her debt.

You will be expected to sign a paper saying you will not take out any credit of any kind, in store or other until you are out of debt.

I’d advocate learning to budget as well. Poeple just do not live within their incomes. I live on 700.00 per month and pay 465 in rent, yet I stay out of debt. It means learning to go without things you do not need. People often think they need dinner out once or twice a week. A coke or coffee each day. Something new to wear each month.

YOu’ll find if yoiu learn to make a budget that both you and your husband can live off of, get out of debt, you will actually save a lot. Learning to sasve for things you want and paying cash, means when you purchase something it’s yours, without interest and no one can come and take it away if you do not pay off a loan.

After you get out of debt, learning the key that you never purchase a home that the monthly payment will come to more then 1/3 of one persons income, not two incomes. That way, if something happens to one of you, you have learned to live off the one income when it comes to the inportant things. If you cannot live off one income for all your major things, Rent or Morgage, Food, Clothing, Water and Gas, Lights, Phone, Internet, Car, Gas and money budgeted for automobile fixes so you have some set aside when things go wrong with the car, so you will not have to go into debt to fix the car.

So get in with someone and get out of debt before you go into a home. Then when you think of buying a home, you cannot state becuas eyou can afford rent, you can afford a home. You have to add into monthly expenses once you own a home. Money for fixes that always need done. Money each month to pay your taxes on the home each year. Renters normally do not have to have insurance, so you will need to add in home owners insurance. You will need to add in yard care, water, buying a mower and other yard care tools. You will have the added bill of sewer and garbage, water, etc. All these you should think about that in addiction to the home payment, you will be spending about 400.00 more each month, at least, for the added expenses of owning a home. That 400.00 is on the low end, most when they add up all the expenses, average out between 800.00 and 1,200 more per month. You do not want to wait until taxes come due each year and wonder where the money is going to come from. Also, taxes usually increase each year.

Good luck. Get out of debt, then really look at each bill you will have once you own a home. Do not get an adjustable rate, get a fixed, that way you are not going up and down with the market. Make sure you can take care of all necessary expenses, including food and personal necessities on just one income. If you can’t, think about saving at least 1/4 of what you’d pay on a home, so that when hard times come, you an still pay the home payment.

Take care and I hope it all works out for the two of you.

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