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I bought my first home (only) based on the prequalification letter based on my income from the bank. the bank said i can afford close to 720k home. so exacly i signed a deal for my home in 2007 for 720k. now i find it difficult to meet my mortgage payments as my other expenses especially health related have gone up. i have been super sincere in paying my mortgage on time. my credit score is more than 750. if i ask boa for loan modification because of my condition, i am not sure whether they will agree for the same. secondly, even if boa does modify the loan, will it affect my credit score? will it impact me negatively by anyway? the current property value is at 580k$. my outstanding mortgage is around 620k$. please advice. also is it a wise thing to go for a fha loan right now thru refinancing, a broker says he will get me 30 year fha for 5.5% given this situation. it just will help converting my 5/1 arm first mortgage to 30 year fha. i still have second mortgage for 70k$ and my first mortgage balance is 550k. is it a wise thing to now go for refinancing my current mortgage given that i have only 2 year left in my 5/1 arm, ? another question i have is, is it possible to refinance my second mortgage for a lower rate? my first mortgage is at 5.75% and the second is at 7%. is there a credit union or any other bank that could help me refinance the second mortgage atleast to save some money per month?

Ok, let me try to answer all of your questions in order. I've been in the mortgage industry for 10 years now and currently work for B of A. Here's what I think. As for applying for a loan modification, it won't impact your credit as long as you're not late on your payments. On the flip side, I heard that banks won't take you seriously unless you ARE late on your mortgage. As for your refi option, rather than refinancing it into a FHA loan which you'll have to pay monthly mortgage insurance payment which will add couple of hundred dollars to your monthly payment, why don't you call B of A and see if you qualify for a MHA plan? (Making Home Affordable). As long as your loan is currently with B of A or formerly CW and the investor is Fannie or Freddie (you just give them your loan # and they'll punch it in to see if your loan is eligible), you can refinance your 1st mortgage up to 105% of the value and subordinate your 2nd loan. You can't wrap 1st and 2nd under this plan, just the 1st and you have to keep the 2nd as it is. If the system shows you as being eligible, it's a streamline refi so really, it's almost stated income, stated assets. Even if they do ask for income/asset verification, your debt to income ratio can exceed 100% which is insane. So, if you're considering refinancing, don't do FHA. Consider MHA first. As to your question on whether you shoud refi when you have 2 years left, that depends on if you think you'll keep this house for a while. Be honest. If you're that upside down and you're already facing difficulty, are you really willing to keep making these payments and wait for the market to go back up? It will take a LONG time to go back to what it was in 2007. Some say 10 years. Finally, you can not refi your 2nd. No lender will refi an equity line these days, especially if you're that upside down. In CA, generally, they will only loan you money if TOTAL combined loan to value (including 1st and the new 2nd) is less than 60%. You're way over 100% so there's no way to get around that issue, period. By the way, I don't know if FHA will let you refinance the 1st loan if your total combined loan to value (1st and 2nd) is way above 100%. I really don't think so. If your 1st motrgage rate is 5.75%, you should definitely look into MHA. These days (and rates went up a LOT in the last 2 weeks), you should be able to get 4.875% to 5.25% range. Don't call one of our 1-800 call centers though. they suck. But call a local branch where you can actually see and talk to them. And always negotiate! They're always up to negotiate. Final note, I would first find out what MHA loan offers for you and if you're eligible. If not, then, try the loan modification. It doesn't hurt. I just called our modification department today for a client in the same situation and was told that it's a 120 day process and they do it over the phone so have your tax returns for the last 2 years, your current income, monthly expenses ready to give them. then, continuously follow up. good luck! ps/ if you do decide to let go of the house, do a short sale, don't foreclose. That'll impact your scores more significantly than a short sale.

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First i would like to say my first wife was a gold digger!!! i married her back in 1997 & even though i make great money now & made great money in 1997! after my divorce from her in 2005 i continued to make all the payments towards our home,cars,credit cards,4-wheelers,etc..... since then i got remarried & things are great with this marriage "thank god!" but last year i finally had to file chapter 7 bankruptcy due to the fact the mortgage my first wife left me with was $1,700.00 per month :-( after almost five years of trying so hard to make the payment it all caught up with me last year. even though i was up to date on my mortgage i finally had to call the bank & tell them i couldn't make the $1,700.00 payment no more & asked the bank if they could just give me a 4.5 interest rate & if they couldn't i wouldn't have to file bankruptcy ! after a week went by my bank called me back & said no sir we can't sorry ! stunned that my bank had rather me file bankruptcy as to give me a lower interest rate because of a credit score i was floored !!! what the bank was basically telling me was if i couldn't continue to pay them 8 percent in interest i could go fly a kite !!! so what do i do now ??? what bank would loan me money ? the judge has already granted my bankruptcy! it's only been two months since my bankruptcy was granted !!! i want my home back or one like it !!! my home was nice & i can't live in a shit hole over a credit score system !!! its all bs if you ask me !!! my income is around 52,000.00 per year & still is ! i need a bank that will work with me on a new home loan & not give me a high interest rate due to a freaking credit score !!! the credit score system is what got me in this mess in the first place !!! the system is way the hell to picky !!!! if a bank checks your credit it hurts your score lol & if your not even but a few days late on a payment "not months" it hurts your credit score, it just goes on & on... it's stupid!!! but anyway i'm a great person & i was good to always pay my mortgage but my banks greed over a credit score system got my bank & myself no where !!! what do i do now ? how can i get a good home without another bank stiffing me? any help would be appreciated !!!! thanks

Unfortunately it will be at least 3 years before you can expect to have a mortgage approved. And then, you'll need at least 20% of the selling price as a down payment. It's not the credit scoring that hurt you, it's your history. There are a lot of things in my history that I wish I could erase and it would make my life much easier now. But history is history and you've probably heard the old saying "You can't change history". I, too, had to file bankruptcy because I was unemployed for over a year. When I did finally get a job I was paying everything on time like you, but the credit card and loan bills were just so high from a year without any income, that I finally caved in financially. Bad thing with me is that I made "just enough" that I couldn't file a Chapter 7 and I had to file a Chapter 13 bankruptcy. How do you think I feel working hard and making decent money (wife and I together bring in about $70,000/year) and still living from hand to mouth for 5 years while I am paying back some of my creditors. At least you walked away owing nobody nothing. So it could be worse. We don't know what will happen if we have a major expense because the court takes every penny except "exactly" what it costs us to live each month. No entertainment, no going out to dinner, no nothing except mortgage payment, utilities, and barely enough for groceries each month. It's like a criminal who was charged with a felony for something non-violent. And then they change their ways and work hard at becoming a good citizen and a great person and regret whatever they did years ago, but nobody will give them a job because they have a felony on their criminal record. Fair? Unfair? Who knows. But it's history. It's all about history.

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In the middle of january my new husband and i began the process of refinancing our loan. we live in maryland and we began working with a lender in our area. we paid for an appraiser to come (their recommended appraiser) for $350, as well as paid $200 for some fee that bank of america charged. the mortgate broker came over to our house and we signed all of the necessary papers about our refinance. over the next 5 months they have constantly asked us for paperwork that we have already submitted over and over again. our w2 forms, our bank statements etc...they blamed the bank for losing this paperwork and so we have submitted these items multiple times. also, they would always say "we're pretty sure you'll be closing this week" today we received a call saying that our loan is dead, even though just last week the broker told us that he had received an extension on our closing and we should close within 5 days. he said our loan was dead because our appraisal was over 6 months old, which it is not. he said the title company can at anytime throw out the appraisal if it goes past 6 months. the broker is now saying he cannot get our money back, but if we recommend him to other people for their mortgage, and he makes money, he will give us our money back. he keeps on making up excuses on how my credit score is too low, even though before he said it was fine. he also said i would have to pay a $100 collection off of my credit report which i did immediately, and now he's saying that's a problem. it seems as though they have tried to make this go for as long as he could and now that there is nothing else to ask for, they are saying the loan is dead. what is going on, can we take legal action, what can we do!??! signed, frustrated

This issue may not be the mortgage broker, but one from Bank of America instead. BoA is huge and has undergone drastic changes since the financial meltdown of last year. Underwriting guidelines are not fixed in stone. What may have been an acceptable credit situation a few months ago may no longer be acceptable. The title firm has nothing to do with the age of the appraisal. That is also a BoA requirement. When one applies for a mortgage of any kind, there is never a guarantee that it will be approved until it actually closes.

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So i went through the pre-approval process and was approved. i gave them my most recent pay stub, they ran my credit, and i disclosed all debt. i was honest and answered everything truthfully. they said based on my debt-to-income ratio and credit score i was approved for 41k. (not a lot, but i also was getting an interest free defered loan from the local government ran housing authority by completing a class for first time homeowners) they gave me the pre-approval letter and i was on my way. in the time between the pre-approval i paid off 3 credit cards and $600 off my car loans. (thus lowering my debt-to-income ratio.) i did not incur more debt, did not apply for any, did not lose my job, was not late on any payments, did not lose income. (in fact, my latest paysub showed that i was making more than they used to determine the d2i ratio) so i found a house, put a little money down, got an inspector, and payed the 'official approval fee'. they immediately denied me. i was shocked. i was set to close in two weeks, and they basically said they changed their minds. the loan officer told me that the underwriters said no because my d2i ratio was too high. when i pointed out i payed 3 cards off and $600 off on my cars (and made more than they thought) they came back with 'your credit score is too low'. i asked my loan officer if they even ran my credit since the pre-approval and he said no. so they said yes at first, let me spend $750 and become legally obligated to purchase the house (i can be sued right?) and then took the exact same info they used for the pre-approval and said no. they &^$%# me, my agent from the housing authority who put a ton of time and effort into this, and the sellers. the housing authority is now threatening to remove them from the list of banks they allow the program participants to use (the bank has been on the list for 10 years and has been getting loans since) the bank then told me i could use my second jobs as a source of income as long as there was no break in a second job. (i told them there was, but they said try anyway) but i got stopped on the last w2 because of christmas and unreturned calls from the employer. i was supposed to close on the 28 of this month, but now because of this i will lose the house. (i will try to ask for an extension but the sellers wanted to close by the end of the year) the bank said i cant afford a $125 a month mortgage. (after my down payment the loan would have been for 25k) i rented my apartment out, and put my furniture in storage, and i have to be out by jan 1st. i don't know what to do, if there is anything. i know i did everything right, i didn't deserve this. if they never lied to me and just said no in the first place i wouldn't be in this mess.....what do i do?????

Correct, until you receive money and sign closing papers on the loan it can be withdrawn, it is not fully approved until they hand over the money.

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Tell me to contact a person with a yahoo email address and say they got a great loan with a 2% interest rate. does this seem like a scam? here are some of the replies.. "i am joy anderson i was in need of a loan of $100 000 usd and was scammed by those fraudulent lenders and a friend introduce me to mr john clarke,and he lend me the loan without any stress,you can contact him at clarkeloanscompany12@yahoo.com" ; "i applied and was approved for one of your loans yesterday and i wanted to write and tell you about my experience. my loan agent, mark m. was amazing! he handled everything very professionally and quickly. he was extremely patient, helpful and very courteous at all times. there was no stress or pressure what so ever. he walked us through the whole procedure and made sure we understood each step before moving on to the next one. i ended up having to call him back with a correction and he took care of it immediately. he was just a true joy and i just can't say enough. i hope you will give him the recognition he so deserves because it has been a very long time since i have had wonderful service like this! this was a totally stress free and wonderful experience! here is there email, john108023@yahoo.com.hk thank you mark!! yours truly, t matthews sr." here is one from him himself..... "i am mr. john clarke, a reputable, legitimate, certified, reliable & an accredited money lender. i loan money out to individuals and corporate bodies in need of financial assistance. do you have a bad credit or are you in need of money to pay bills? i want to use this medium to inform you that i render reliable beneficiary assistance as i'll be glad to offer you a loan at 2% interest flat rate. what did your bank say concerning having a loan from them???? don't feel disappointed if they refuse granting you a loan. i hate what the banks do when customers/consumers are willing to lend money even with collateral and valid documents. i look forward permitting me to be of service to you. send me an- e-mail me by replying to my email clarkeloanscompany12@yahoo.com and i'll do my best to help you out in your bad finances situation. regards, mr. john clarke." it just sounds fishy to me. i'm looking for a home equity loan or 2nd mortgage to help pay off some medical bills and for some extensive dental work for my son. would also like to have some in savings for emergency. my wife and i have a low credit score due to a injury about 4 or so years ago and not being able to work. most of our income go towards helping our son receive services to help him succeed as he has a disability. i am now back to work and my wife continues with her job as a teacher. we also have our house paid off in full and have no credit cards. the only debt we have are some medical bills. it just seems weird how some people have replied with a few different email address about this guy in my other questions. i guess if i read the paperwork thourougly and have a attorney look at it i should be alright if legit, correct? thanks for the answers. i emailed the person with a email address i just created. it is someone from nigeria asking info such as name, address, phone number, and ssn if applicable. it is a total scam for sure. i also read other questions on here similar to mine with the same sort of responses. if it sounds to good to be true, it usually is! that's kind of what i figured but thought it was worth asking. i'm going to talk to my local bank, explain my situation, and hopefully they can help or point me in the right direction. thank you everyone! the name of this guy's company is... clarke loan firm located in nigeria. millions of spammers from there! here's a link to my original question if anyone is interested....... http://answers.yahoo.com/question/i ndex;_ylt=alrca7gwy7htsnzeel7kthvsy 6ix;_ylv=3?qid=20090611233627aa801o 6

People with enough cash to be able to loan it to others don't use free Yahoo addresses. Even if paperwork looks legit it could be copied from a bank's contract - doesn't prove Mr Clarke is legit and wastes your money on lawyer. At some point they probably ask for your bank account details 'to deposit' funds, and they'll have lots of other personal details so they'll be all set to commit fraud and rip you off. Or they ask for a fee upfront and don't follow up. Or they do loan the money but the interest rate climbs after 1 year. Or something else dodgy. Don't put yourself at risk. Good luck in finding a safe way forward.

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With all of the on-line tools that appear to exist to create a ficticious business (web pages, efax, etc, etc...), how does a lender verify a small company actually exists when verifying an application for a mortgage loan. specifically mr jones, indicates that he works for x small company and provides realistic looking proof of employment of recent employment by xyz company. i am thinking about selling a piece of property and holding the paper myself. i have verified: 1. via credit report that the person has excellent credit history with a score in the low 900's and his only debt is his existing home mortgage. 2. via bank and brokerage, that the person has substansial financial means, but very little current income 3. the open question is that although the person has a history of greater than 10 years of very good salary (150-500k/year) he did not work (he indicates by his choice for over a year) until very recently (just less than a month). 4. my preference was not to hold the paper on the property so i asked him why he did not just go get traditional mortgage financing and pay me out. he indicated that the bottom line was he tried but even with his credit and work history that the current lending guidelines will not allow him a mortgage soley because: a) his current income is from a small company and for less than one month... 5. he is putting up 40% in cash (as he offered to the mortgage lenders) and based on his bank, brokerage, and retirement accounts he would have enough to pay his current home loan for years and pay this new note for years without ever working a day. so my bottom line is....i am suspicious of why a traditional mortgage lender would not lend money to him and i wonder if they know something i do not about his current (new) employer. your insights/expertise would be greatly appreciated. thank you i guess what i want to know, is how would those that make a living off of making mortgage loans look at this. how would they investigate, or would they investigage, the 'employer' given everything else is pristine (i only wish my financial situation was as positive as what i have verified on his). it brings me back to why wouldn't they loan him the money?

If it smells funny and the banks wont touch it, then you shouldnt either. If you want to verify that his company is legit, then you can check their EIN number (the number that the IRS provides them with) to verify that they exist and are a legal entity.

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My girlfriend and i both have credit scores over 700. combined income of 100k, and want to borrow 250k. we've paid off everything that we owed from college (except for a $140/month student loan) so we've only saved 10k. an enormous bank located in charlotte scoffed when i asked about this...they require at leat 5% down. don't some of the other factors make us creditworthy??? i want to get a place now while the market is depressed and rates are low.

Talk to a different mortgage broker. You can get a house for 0% down if the seller is wiling to pay concessions. FHA requires 3% down and will allow up to 6% in concessions towards closing cost. In your purchase agreement you ask the seller to pay 3% for "down payment assistance", plus a fee between $299- $500 (depending on the program) that will go to the assistance company. You also ask the seller to pay up to 6% towards closing costs.

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Can i pay part of a mortgage down payment using a credit card? i am planning on buying my first house in the state of indiana. ok so the asking price is 220k. i am going through my bank (chase), have 30,000 in cash for down payment. i would like to pay another 15000 or so using a 0% apr amex credit card as a down payment in addition to the 30k to further lower the interest rate and loan term. so can i use 30k cash and 15k from a credit card for 45k down payment?? my credit score is in low 700's. any advice is appreciated. thanks also will i be eligible for the 7500 tax credit if i buy this house within the next 2-3 months.

You can't use the credit card and you will get the $8,000 tax credit you don't need to repay. You could take cash advances on credit cards but then your debt might be to high to get a house.

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First off, i live in sugar land/houston, tx. my husband and i are hoping to get a house in the austin or conroe area in the next year to two years. my husband was once in the military and we do our banking through usaa. i've emailed them and haven't gotten an answer for this question yet and being that we have a little monster running around the house all the time, i haven't had the quiet time to make a phone call to them to ask this question. hoping to get a loan through them. a little background on us: we have 2 vehicle loans at about $26k total. i have two credit cards in my name totaling about $2500 and we share a credit card at about $6,000. we are about to pay off one of the cars and the big credit card. my understanding from working at one of the credit repositories is that in order to get a loan for a house, one must have 3 revolving lines of credit. i was also told that it is best to keep the credit lines at a good amount and pay them down monthly, not paying them completely off every month as to show responsibility and to increase your credit score. i was recently able to get credit at a furniture store even with the big credit card and vehicles on my name whereas my husband could not. we are not sure why this is as we have looked his credit and we don't see an issue except for an old business cell phone bill that he waited on paying and then finally paid once it his collections a few years ago. i'd like this removed but i'm not sure exactly what we can do about it. i'm concerned that his credit might hold us back from putting us both on the loan, thinking that with us both on there, we might have a better chance at getting a larger loan. i'm not sure how that works and if that matters though. so with all that, does anyone know what would be a good way about getting a loan with the credit we have? should we pay all the cards off and just keep those accounts open? or keep them at a lower amount paying them off monthly? we will have money to put down on a house when it comes to it but we need advice on the credit part of it. thank you.

You are right that carrying a small balance (less than 30% of the credit line) will help. Your credit will actually carry more points with a small balance than it will with a $0 balance. Although a previous poster thinks that your credit score is made up entirely from making payments on time, this is false. Payment history makes up about 30% of your credit report and score. Your credit score also depends on your current credit utilization, which includes your debt to income ratio, your credit limits vs credit balances, and even the mix of credit accounts that you have. To explain a little further, you are supposed to have a good credit mix that should include not only credit cards, but car loans, mortgage loans, etc. Believe it or not, only having credit cards does negatively affect your score. Also, the number of inquiries on your credit report affects your score. Inquiries happen when you apply for credit, even if you are unapproved. Inquiries remain on your credit report for two years and anything over five in two years can negatively affect your score. If you get a quizzle account, you can see you and your husband's credit score for free and they will tell you what is negatively affecting the scores and how to improve it. It has been a great resource for me, as we are in the same boat as you. Good luck! Hope that helps!

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I need some help with no docs/stated income home loans. my husband and i are in the process of getting pre-approved for a home loan. i was assigned a loan officer that asked for all documents, w-2, pay stub, bank statements, 401k. i provided him with all documents. he told me he will be using a stated loan because the fact the my husband pays child support will disqualified us. my husband credit is in the upper 700's close to 800 for the highest and mine low 700 lowest 706. now here come the question is this loan officer trying to take advantage of us? if we provided proof of income don't we should be doing a full loan documentation? oh and he is using my credit score vice my husband and he stated the reason child support again, we were approved already for a mortgage but the loan officer was not honest and we backed out of the deal and child supports was never an issue. i live in the san diego, ca area. can i make this loan officer use my husband score and full loan doc? thx

Without knowing the full scenario although you described it very well I would state that it may be easier for both of you to go no doc because you dont have to verify the history of your financials. No doc loans are for the very elite FICO score persons who can qualify. Yet, be careful that you are not getting hit with rate charges because you are going No Doc. Some pro's to going No Doc are Quicker Funding Times and Closing Times over the traditional full doc. Child Support is such a stickler to banks and lenders that it can mess up the process of closing a loan. Make sure you can sit down with the loan officer or have the LO answer all your questions in regards to why it benifits you to go No Doc over Full Doc. If he/she cannot explain to you in a way that you can understand than get yourself another LO. Good luck.