iamjoesmamma asked:


My husband and I are in need of a bigger house. The sooner we can get it, the better. We refinanced our mortgage on our current home almost 2 years ago, but that was before our 4th child was born. The house is in both of our names, but originally it was just in my husband’s name until we refinanced. Our credit was bad, but has improved. 5 months ago, mine was 620, and my husbands was just below 600. We haven’t had any late payments since the refinance and my husband and I both have a decent income. We live in central IL and the cost for a house that would be big enough for us would be between $75,000 and $180,000, depending on the condition of the house. Together, my husband and I make about $42,000 a year. Our current home will be worth about $85,000 to $90,000 when we are finished remodeling. Could I apply for a home loan within the next few months or would it be wise to wait another year to 18 months before applying?
I forgot to add that the income amount that I listed is what we bring home after taxes and such are taken out.
We would have to sell the house we are in. we only owe about $52,000 on it. We don’t want to put in on the market until we know that we would be able to buy another house. We are in a great location but we have outgrown our house. We are right across the street from the elementary school in our town.

Daniel

Brian asked:


Is it possible to get a home equity loan or 2nd mortgage with a poor credit score. The one thing we have going for us is that our house is completely paid off. We have no credit cards and our vehicles are also paid off. The only debt we have are some medical bills that we are making payments on which is around $2500. My wife and I are both employed and make decent income of around $6000 monthly. We just have some things coming up to where we would like a loan for around $15,000. I think our credit score is around 590 . (We ran in to some difficulty when I lost my job and had a baby born with a disability and medical bills piled up). But with that much equity and such a low score would there be a loan company that would work with us? Would our local bank be able to help or should I check around on the net that specialize in bad credit loans? Any recommendations?
Thanks!
Thank you all so much for such great answers and some great explanations! Our original loan for our house was over 10 years ago so I don’t remember much about how all of that loan stuff works. We have never checked in to a equity loan so I know nothing about them except for some research on the net. I think I’ll start with my local bank and go from there. Thank you all!

Danity……I have no idea what you meant by your answer!
One more quick note. I was not working for quite some time due to a back injury that ended in surgery. I have now been back to work for a little over a year now though. My wife has been a teacher for 12 years. So, we had a 2 year span to where our credit went down the drain but the last year have been on time with what little debts we do have. I was also thinking it would be difficult to raise our credit score without having any credit out there. Maybe starting with a credit card and just using it for small purchases and paying off the balance each month would be one way. I was also thinking with the equity loan would really help rebuild our credit with timely payments. My son needs some extensive dental work and that is why we are wanting a equity loan to pay for that and other services he needs due to his disability.

Louis