Buying a house with a foreclosure on my credit???

Question

In 2007 my house foreclosed do to my ex trying to ruin my credit cause I left him. Turns out my name was only on the smaller loan so my credit score didn't even drop! It is still in the mid 600's. I am now married and my husband just had to repo his car since there was no other way to get out from under it. We live in Northern California where houses left and right on every street and being foreclosed. We are considering buying a house since the market is so bad....but a good time to buy because practically every house is bank owned. Besides my foreclosure, my credit history is flawless! My husband's is not too good. Is there any possibility that we could buy a bank owned home and get approved for it on our own? Are banks starting to look past foreclosures since it is so common now these days? We have a one year old and want to start planning on our second baby so it's time to find a more permanant home and get out of apartment living! Any advise will help!! Thank you!

Answer 1

Since when is a credit score in the mid 600's "flawless"?

Flawless is 830.

Even I do not have that and I have paid every bill in my entire life time, I do not try to cheat anyone.

Banks are NOT willing to look past a foreclosure.   That would be nuts.   A foreclosure is documentation that you will in fact s***w the bank.    Why would another one sign up for that?

If you think your credit is good compared to DH, his must be in the toilet.

CA is a community property state, you both need decent credit to get a loan.    Wait until you are both 700+

Answer 2

Not going to happen.  Your credit is NOT flawless, since a foreclosure is a VERY serious ding to your credit file.  If your new husband has just had a car repossession, that only adds to the problem.  

Lenders have foreclosed on a lot of houses.  They aren't willing to take a risk on having ANOTHER foreclosure, just because they have a lot of houses for sale.

You can try with a mortgage broker in your area, but my guess is that their answer will be a flat "no".

Answer 3

YOU two need to repair your credit first.  You have booth made poor financial decisions and are facing the natural consequences.  Market will not turn around too quickly, so you have time.  Spend 6-12 months repairing credit by paying all bills in full and on time.  Pay down credit cards, stop buying on credit anything you can't pay off when bill arrives.  Pay 2-4 times minimum every month on credit cards until paid off.  Your credit is intertwined with your hubby's since you're married, so it's a joint problem.  Recommend putting second baby on hold until you get your finances more stable and are ready to buy.

Buying a foreclosed home is more problematic than a regular home, as banks act very slowly--decision-making by committee.  Buying a home from a homeowner needing to get out from under is better.  Buying a home that's a short sale can be a good deal for you.  It requires bank approval, but usually isn't a slow as buying a foreclosed home.

After 3-5 years of good credit, banks are looking past foreclosures, otherwise it makes them look very closely at your applications, so good credit is required.  Underwriting is more stringent than previously.  You can do this IF you want to, but no one is going to give you a home and mortgage because you WANT it.

Answer 4

Honey, a foreclosure is MAJOR financial event.  

You were equally responsible for paying the mortgage with your first husband..there is no "his" and "mine' in a marriage when both of you own the home...you made the choice to leave, and you can't walk away from the debt.

People with "flawless" credit also have credit scores WAY above the mid 600's..so yes, it has significantly impacted your credit score.

Unless you want to pay double-digit interest rates, no bank is going to refinance you for a minimum of 3 to 5 years.

They aren't going to "look past" your foreclosure...banks have already had one and they don't want another.

Plus with a repossession on your husband's record, you would probably need 30 to 40% down in order to qualify.

Answer 5

Be very careful when it comes to buying a forclosure. First thing to do is to get a pre approval to see if you can get approved. Call a Wells Fargo near you. I just purchased a house through wells fargo and my credit was not so good. They go through many different lenders depending on your credit, etc. Make sure that the foreclosures are on the market through a real estate agent also because you could have a big headache on your hands if not. I also tried to buy a foreclosure that was not on the market yet. There could be more strings attached with foreclosures such as second mortgages, home equity loans or leans. If you buy one of these and there are any leans, they are attached to the deed of the house and become your responsibility to pay. Have you and your husband try through Wells Fargo. They will tell you wether you both qualify or if only one of you will.  

Answer 6

You might qualify since your credit rating is above 620, but your husband will not.  The repossession took care of that.

You both have a big fat black mark on your credit report, your foreclosure, his repossession.  It is highly unlikely together you can qualify for a mortgage for awhile, a lender is going to want to see two years of seasoning from the foreclosure/repossession.

Even though foreclosures are more common, lending restrictions are more stringent, and lenders are not relaxing their standards.

Answer 7

No, the mortgage companies are not making it easier to get loans.  They don't care if the banks are stuck with houses.  And foreclosure homes can be a little tricky to buy- you do need like 20% cash to put down on them and some mortgages will not cover them if they have damage or anything wrong with the home.

I was told I barely made with a credit score of 750 and I was told I was mid range- average not good.