Post # 1
Member
377 posts
Helper bee
So here is our situation: We live in his house. It is tiny, old, badly in need of a bazillion repairs and upgrades. We hate it. He is self employed and makes about $120K, but he took out a 2nd mortage on this house years ago when he was married to his ex. She was a horrible, money sucking monster and squandered this money that was supposed to be start her own business. Now the house is underwater and his credit is shot from sharing credit cards and such with his ex. He pays like $2500/month total on this crap-ass house. His finances have been good for the past three years, no late payments, payed off all debts except the mortages.
Me-woefully underemployed and essentially contributing nothing financially. Though I have my own business as well. It is just in the baby stages. I have perfect credit. I own a townhome in another state. It is rented to a wonderful woman. I owe $114K and it’s worth about $155K. Interest is at 6.5%. I would love to refinance, but don’t think I can as I essentially have no income.
We would love to get out of his house, but don’t know where to start. He has money, but crap credit. I have credit, but no money. We marry in September.
Any ideas?????
Post # 3
Member
357 posts
Helper bee
Have you had his credit pulled? If he’s really paid everything on time for the last three years, his credit should not be bad enough to keep you from getting a mortgage, unless he has a lot of outstanding judgments and/or collections. I would suggest contacting a trusted lender, and starting there to see what you’re working with.
If it’s really bad, a smaller more flexible lender, like a local credit union or bank, may be able to approve the file on an exception if you can show that the delinquent accounts were all assigned to the ex in the divorce, and only became delinquent after being assigned to her.
As for unloading the current underwater house, if he has enough money, you can sell it for whatever you can get, and then pay the difference between that and what he owes in cash at closing to get out of the house without it being a short sale. If that’s a no-go, but he can qualify with both the current house payment and a new payment, you can just keep his house and rent it out. You won’t be able to count that rental income towards qualifying though, with no equity.
Hope that helps. This is what I do for a living, so let me know if you have other specific questions.
Post # 4
Member
1668 posts
Bumble bee
- Wedding: October 2014 - Church
@whitefuzzy: I don’t specifically know about where you are located. There are also mortgage companies (in Ontario, at least, there is Home Trust which is one that is specifically for those with not as great credit – you just need a higher down payment to begin with and your insurance is higher – they are a pain in the ass to deal with compared to the big banks, though!). I know that it has gotten really strict in the States but I know nothing about it there. I would suggest a mortgage broker 🙂
Post # 5
Member
377 posts
Helper bee
moriah,
Thanks for the advice! I will ask him what the number is on his credit. We looked at a few months ago, but I forgot. Maybe around 520? Around that time he applied for a credit card from REI and they turned him down. The only thing he owes on are the two mortgages, of that I am sure. He hates talking about it, because of all the emotional baggage. He is convinced he is stuck in this house for seven years, end of story. People, (including our tax lady) have told us it would be really hard to get a home loan because he is self employed and doesn’t have a W2 to document income?? I’ll get some more details and get back with you.
Thank you again : )
Post # 6
Member
46 posts
Newbee
I’d suggest that you sign up with creditkarma.com. It’s a free website. Not sure if they have the same thing in Canada, but it’s worth looking; or maybe you could find something similar. Essentially they help to track your credit score, and there is a TON of free advice on improving that score. I used it when I was trying to buy a house and discovered that there were taxes in arrears pulling my score down.(thank you ex). Long story short, I did manage to pull up my score enough to buy my house. Hope it helps!