• It's Still Possible to Qualify for a Mortgage Despite Bad Credit

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    outstretched hands holding the word credit

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    By Scott Sheldon

    Today, there is still a general consensus that to buy a home you need to have 20 percent down and a good-to-excellent credit history. The good news is you actually don’t need a large down payment or great credit in order to purchase a home with competitive market terms. Let’s look at the characteristics of what a mortgage lender deems to be bad credit when it comes time to qualify for a mortgage loan.

    Credit Score Scale

    740-800 Outstanding
    720-740 Great
    700-720 Good
    680-700 Mediocre
    *620-680 Less than perfect, but approvable

    A mortgage company’s definition of bad credit might not be what a consumer considers to be bad credit. A credit score of 620 or higher is required to successfully obtain a mortgage. By the same token, a 620 credit score is considered by a lender to be less than perfect, but it’s still possible to get a mortgage with that score.

    Your credit score determines two major things for a mortgage company:
    Loan program – Whether it’s a conventional or FHA-type mortgage.
    Pricing …read more  

  • How 'Accidental Landlords' Say They Fell Victim to Nonpaying Tenants

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    tenant Daniel Helms in screen grab of WCCO report

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    A Minnesota couple who signed rental agreements on Twin Cities-area homes reportedly managed to live rent-free for months after moving in and allegedly refusing to pay rent. By the time their eviction made it through the court process, though, their landlords were out thousands of dollars, says a local TV station.

    When the bubble burst on the housing market about five years ago an explosion of first-time “accidental landlords” were created — when owners decided to rent out homes that they couldn’t sell or chose not to sell at decreased value. Lower housing prices, meanwhile, led others to buy homes at bargain prices and turn them into rentals. Some of these inexperienced landlords fell prey to the kind of renters who cost much more than they pay in rent — if they pay at all. Purported examples of these are Daniel and Rachel Helms who, their recent landlords say, didn’t even have money in the bank to cover their $1,700 security deposit check.

    “I deposited it, and the next day I had noticed in my Wells Fargo account that it had bounced,” accidental landlord Cody Johnson told Minneapolis TV station WCCO (as seen …read more  

  • Don't Let Student Debt Keep You From Graduating Into a House

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    By Scott Sheldon

    Anyone who has tried to apply for a mortgage and had student loans knows what it’s like to be scrutinized and questioned by the mortgage company over the impact of those obligations. Like other forms of debt, such as car loans or credit cards, student loans are in the same classification: debt made against income or rather an ability to repay.

    Just like all consumer debts, student loans can reduce the ability to borrow because they erode income. So let’s take a closer look at how your student loans can hurt your mortgage application, and what you can do to protect yourself.

    Quick Life-Cycle — Student Loan To Home Loan: Student loans are reported on a credit report just as any other payment obligation. In many instances, the student loan payments are deferred, extended out into a future date when the payments kick-in — if they have not already. Lenders are required by law to account for all material debt known to …read more