AboutEric Forster Expertise Did your last mortgage broker or lender trick you into a messy situation which could cost you your home? I've been close to 30 years in the mortgage industry, and I've seen it all. Believe me, it is not pretty.
As the owner of a mortgage company I am called frequently to testify as an expert witness in mortgage fraud cases and other cases where lenders did not fully disclose the terms of the loans they were offering to the borrowers. I have seen fraud being committed by borrowers - and by lenders. It's a tough world out there.
Experience More than 25 years in loan production and underwriting in Southern California.
Organizations Mortgage Bankers of America (Southern California Chapter)
Publications Former columnist for AOL Financial Center and the author of a mortgage primer.
Question Dear Mr. Yaari,
I am in the process of repairing a poor credit history (my credit score right now is about 600). Recently, I repaid a delinquent student loan and I have a charge off on my credit report that is almost 7 years old. I hope I am correct in my understanding that this will drop off my credit report after 7 years. I just got an unsecured credit card, with a low credit line (just $200) and I'm going to be opening a secured credit card and a savings account. My husband's credit is irrepairable right now- (auto reposession, tax judgement, late payments on credit account) and to make matters worse he is self-employed. I would like to try to apply for a mortgage on my own, possibly in May 2005. I only make about $25000 anually. First question, can I apply for a 1st time mortgage without my husband as a co-applicant? Secondly, do you think my credit rating and income would make it impossible? I could probably put about $7000 down. Thank you in advance for taking the time to answer my questions and for any advice you can offer me.
Julie
P.S I would be looking in Pennsylvania
Answer Hi Julie,
Most lenders require you to have at least 4 credit accounts which are at least 2 years old and which are in good standing. By "credit accounts" I mean credit cards, car payments, debit and department store cards, and of course, student loans. You are right in assuming that derogatories drop off after 7 years, however, if all you have is just that one credit card, there is not enough credit history to qualify for a loan.
You can apply for any kind of mortgage without your husband, but then you have to qualify for a loan based on your income and credit alone. With very little credit and income, your chances are not very good.
But there is one possibility. Some cities, counties and states have very liberal underwriting guidelines in their 1st-time homebuyer programs. I suggest that you contact a mortgage broker who's experienced in doing 1st time homebuyer programs, and have him qualify you for such a program.
Below is a list of programs available in Pennsylvania, as well the the contact people and their phone numbers.
Best wishes,
Eric Yaari
SPA WHOLESALE CODE
C = Coventional
F = FHA V = VA
R = RD
Eligible 1st MTG. LOAN TYPES
State
DAP Maximum Assistance Amount
Contact
Phone #
PROGRAM NAME
DPACOBFTW Bucks County First Time Homebuyer Program (FTHB) C F PA $10,000 Sheri Pace (215) 598-3566
DPACRBNDW Carbondale First Time Homebuyer Assistance Program C F PA $5,000 Thomas Ruddy (570) 282-0280
DPACHSTMW Chester Economic Development Authority Moderate Income Homebuyer Assistance Program (MIHAP) C F PA $5,000 Lisa Gaffney (610) 447-7850
DPACHSTRW Chester Homebuyer Assistance Program (HAP) C F PA $10,000 Lisa Gaffney (610) 447-7850
DPADAUPHW Dauphin County First Time Home Buyers Program (FTHB) C F PA $3,500 Terry Haines (717) 780-6250
DPADELAWW Delaware County Homeownership First Program (HFP) C F PA $5000
DPAJEANDW Jeannette Downpayment and Closing Cost Assistance Program (DAP) C F PA $3,000 Andrea Petrill (724) 527-4000
DPANHSLEW Lehigh County Neighborhood Housing Services of Lehigh Valley Inc Homeownership Outreach Program (HOOP) C PA $25,000 Janis Geist (610) 437-4571
DPALUZGHW Luzerne County The Growing Homeowners Initiative Program (GHI) C F PA 3750.00 Maura Rutt (570) 824-4803
DPAANHSHW Northhampton County Allentown Neighborhood Housing Services Inc Home Ownership Outreach Program (HOOP) C PA $25,000 Janis Geist (610) 437-4571
DPATREHBW Pennsylvania Trehab Center Inc Homeownership Program (HP) C V PA $14,999 Corky Staats (570) 278-5238
DPAPHILAW Philadelphia Settlement Grant Program C F PA $1,000 Alan McIntyre (215) 686-9706
DPASCHULW Schuylkill County Schuylkill Community Action Closing Cost Assistance Program (CCAP) C PA $1,000 Lisa Fishburn (570) 622-1995
DPAYORKLW York 3/2 Low, Moderate & Unlimited Income Mortgage Assistance Program (MAP) C F PA $25,000 Holly Elicker (717) 854-1541
DPACNTYRW York County 3/2 Low Income Program (LIP) C F PA $5,000 Holly Elicker (717) 854-1541
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