not gonna happen

[mellowtigger]

A year ago or so, I talked to two banks about home loans and they both told me on the phone that they didn't work with loans "under $100,000".  I've had more success this year on that point, but I've now been turned down twice because I don't have enough debt.  It's bad to live by the goals of simplification and self-sufficiency when applying for a big loan.  You have to be in debt (and paying religiously) in order to qualify for more debt.  I was told again this morning that my credit score is good, but there's just not enough involvement/history for anyone to offer a loan.

It's really a shame too.  That $35K house really would've been a nice small place for me to retire someday.  The mortgage (even with taxes and insurance) would have been cheaper than my current rent.  It needed a few repairs, but none of them sounded expensive.  Oh, and just 3 or so houses south of it, there was this nifty little urban garden that I could have used too.  All that, and only 1 mile from work.

I am disappointed that it's not going to happen.  :(

Meanwhile I was told that I should try to build more "alternative lines of credit".  Paying car insurance each month would count.  So would paying a store credit card.  The pet store is always on my case to get a card when I buy cat litter.  I may have to take them up on their offer.  That would get me the last line of credit that I need.  I could someday quality for a house loan because I buy cat litter on a pet store credit card.  That's how messed up the American financial system is.  *facepalm*

Comments

[foeclan.livejournal.com]

But you were paying car insurance until just recently.

[mellowtigger]

Yes, but credit reports only matter if the information is bad. No, really.

The first loan person read off my 10-year history of paying off credit cards, student loan, and new car. None of it mattered in the least. The good stuff only matters if it's current as of the minute that they peek at it.

The second loan person was a lot more accommodating, trying to find the various other ways that (current only) credit could be established. They count things like:
car insurance (mine currently on hold at State Farm),
store credit cards (I've always avoided the unnecessary complexity of them),
phone bills (I prepay by year),
cable television (mine is included in the rent),
health insurance (mine only started this month),
etc.

So I have only one "current" line of bills: my monthly rent. And that's bad, if you're a loan officer.

[foeclan.livejournal.com]

Which is, of course, madness, since the mortgage payment would be less than your rent payment. Would it help if I gave you a reference as your landlord or something?

[mellowtigger]

Unfortunately, no. We were counting rent as my 1 and only recurring payment line. I still need several more, but they just don't exist the way that I've structured my life.

I now have health insurance again. I'll be reactivating my car insurance eventually. I just need to get a Petco store credit card to buy cat litter, and then I'll have all 4 "alternative lines of credit" for loan consideration in summer next year.

I rather doubt that I'll spot anything as ideal as that property, though. Proximity to both work and community garden were awesome features. :)

[loganbeary]

Maybe you can find someone to co-sign a mortgage with you? And then in a couple years after you've established a good payment history with mortgage, utilities, and Pet store credit card (I'd consider getting a home depot card too, might come in useful to have established credit with them for home related materials), you can refinance it and they can quick-claim their interest in the property to you?

[loganbeary]

Call back that second loan person and ask them if a co-signer would make a difference? And what would the co-signer need to bring to the table to make it happen?

[loganbeary]

Looks like the house is no longer on the market. :o(

another possibility available

[loganbeary]

If you can find a co-signer

Here is a house in the bearberhood (meaning lots of bears live in this part of North Mpls):
http://www.edinarealty.com/MN/Minneapolis/55412/homes-for-sale/3419-Sheridan-Avenue-N-63555984/popup

Doesn't seem to be any housing code issue hurdles to manage either:
http://apps.ci.minneapolis.mn.us/PIApp/GeneralInfoRpt.aspx?PIN=45340

Re: another possibility available

[mellowtigger]

My father offered to co-sign a loan, so I did call back the guy to ask about it. He was going to check on it, but he didn't think it would matter. He said that co-signers usually matter only if the loan is bordering on too much debt for their income, which is clearly not the case with me. He said he'd check on it, though. I'll talk to him again on Monday.

Yeah, my father also noted that the listing appeared to be withdrawn. It better be that somebody bought the house to live in themselves. If I see that property on the market again in a month at $150,000, I might have to puke at the selfish greed of capitalism in America. :/

Re: another possibility available

[loganbeary]

That doesn't sound right to me, from my experience a co-signer's credit and income are combined to qualify for a loan because both parties are legally responsible for the loan then. It should work if he has a solid credit history.

Another option is for your father to buy the house himself, with your down payment, and then either have you co-sign his loan, or do a "Contract For Deed" with you. But a "Contract For Deed" wouldn't necessarily solve your credit issues, I think it would be better for your credit to be making direct payments to a bank in your name.

Don't be afraid to start this process over with a 3rd banker bringing your dad in as part of the picture at the start. Maybe your dad knows a banker personally? :o)

http://apps.ci.minneapolis.mn.us/PIApp/TishRpt.aspx?pin=21428 What I find curious is the owner is a David Walker of Green River, Co. Any Relation?

Re: Correction

[loganbeary]

David Walker
Green River Company
700 Twelve Oaks Center #202
Wayzata, MN 55391

He was the one selling the house I'm guessing.

Re: Correction

[mellowtigger]

Interesting. I didn't notice that connection previously. It's entirely possible he could be a relative, but we wouldn't know it. There was once a sharp disconnect in the "Walker" family tree, so there has been no communication between the different branches that I know of.

I'm really not keen on putting someone else's finances on the line for my sake, but I will check again on Monday with the loan officer to hear what he says.

Re: Correction

[loganbeary]

I don't know if there'd really be any financial risk involved here, if you do buy a home in that price range, it mostly likely will have instant equity and easy to re-sell if the need arises. And the idea is to establish a history of making several kinds of payments over a year or so, which owning a home you will do with a mortgage, various utilities, Petco Card, etc. Once you've establish that kind of history it should be no problem refinancing it solely in your name.

I hope you dad can help you get pre-approved, it's best to have that lined-up before looking for a house anyway.

Have you talked with that Mavrik Realtor from Lavender?