October 24, 2008

Bad Credit Mortgage in Colorado….is it possible or should we just file Bankruptcy?

We are looking to purchase our first home in the Denver area in about a year. We both have bad/old credit(both of our credit scores are below 600) Our income will be around 75k(I am finshing up nursing shool)

We are trying to see if this is even possible or if we should just be content renting for several more years.

We are expecting a higher interset rate. I have heard of "B loans" & "sub prime lenders" and have been trying to look into them.

We are trying to decide if we should just file bankruptcy now and see if our credit gets better or if it is possible to get a loan?

Will we need 20% down with this bad of credit, or can filing bankruptcy help that?

Filing for bankruptcy won't help your credit score… it will make it worse. Keep renting, repair your credit. Talk to a loan officer at a bank or credit union about how to improve your credit. Take their advice.

Loans are based on several things. Your credit history, your length of employement at your current job, your debt-to-income ratio, the value of the collateral (in this case property) compared to how much you want to borrow, AND your 'character' as perceived by a loan office.

You don't always need 20% down payment… sometimes that amount can be a second loan.

Bankruptcy is not for 'convenience' sake. It is SUPPOSED to be for those who can't repay their debts due to some significant situation which IS BEYOND THEIR CONTROL. It will NOT improve your credit rating. It will NOT improve your chances of getting a loan and it will NOT improve the terms of any loan you get.

Repair your credit rating. You created it yourself…fix it yourself. It can and has been done.

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