BIG E fo Easy street - Posted by Kenneth Hocking
Posted by Kenneth Hocking on May 30, 2008 at 06:05:08:
Let’s take this REAL deep
You have managed to save 18,000 without taking Care of the 13,000 in previous debts. Looks like you got the pay yourself first down well. but your credit has suffered
As Far as your credit cleaning runs… the age and size of the balances that make up your 13,000 makes a difference on whether your credit should be CLEANED up or whether you Should negotiate to pay down the debts or just ride them out until they fall off. the tipping point will be determined by the type of debt and its age.
Ed is correct in that Creditinfocenter.com and my favorite creditboards.com is a wealth of Info.
But here is my take and really depends on some Great assumptions made by me
With a home worth 65K and a purchase price of 18K and 13K in debt balances if you went to the bank and put all of your arsenal on the table it could play out like this
Mr. Bank President I would like to Finance a Home I own at 50% LTV which is 32500 and I would like to put up a 6K CD pledged against this Loan as well so the bank will be in just over 40% LTV on the Home in their town/area. My plan is to take the 32,500 and use 13,000 to clear up all my outstanding debts ( we can even have the title company pay these debts directly if you wish mr Banker), give 6K to you in the form of a CD pledged against this Home meaning you lose it if you do not pay for the house
Since I and you “mr Bank President” know this area has limited rentals I plan to rent this home out at $675.
SO what I need is a 50% ltv loan with a 6K Pledged cd and a 10 Year Am at 8% ( prime plus 3) but ask it to be fixed at least for 3 years if not 5. with the ability to renew it later for a 10% buydown and
What you need to know is you Insurance and taxes. I am going to assume the Taxes are 100 a month and Ins is 50 a month this would bring the PITI for 32500 at 8% for 10 years to 394 PI +150 TI =544 PITI
At the end of this if it works you will own the house, have paid off your 13K in Balances, Have a 6K cd and about 13500 minus closing costs in your warchest to go look for another deal and about 130 a month in cashflow.
The 10 year am at Hogher interest with the pledged CD and the LOW LTV and a business Plan that shows the bank you are serious about your future is you best shot.
Lastly for added measure but only if needed you may have your grandfather co-sign with you.
If they delay/deny you may want to use the same idea at the CITI and Beneficials that Ed said use.
It may also be possible to talk the duaghter into taking 6K down and Payments and then you can use you funds to pay off the bad debt and then in 6 months after beng on title you can go to the bank to refi.
At the local bank the short term and pledged CDs are key!