What kind of loans are available to buy a house for someone with not so good credit?

My husband died early this year. He had, so he said, and insurance policy for $88,000.00. He got papers every year from Prudential which he opened and put away. When he died, however, and I called the company, I found out that he had lied, (not the first time), and the only insurance he left was a 2000.00 policy in his parent’s name, he had let the other policy lapse last year.

The house I am living in now was in foreclosure...my late mother in law bought the house back in 1996 and we paid her rent money every month towards the mortgage payments. After she died, my husband took the advice of a friend of his at work who told him, "You don't have to make any house payments until the probate is settled", which of course was not true. So my husband, while assuring me he was making the house payments from a checking account he had in his own name was in fact not making them, and lying to me about it. (YES, I KNOW he was an idiot, but it gets worse.)

Without telling me a word about it, he allowed the house to go into foreclosure, it was a default case, and he didn't even OPEN any of the papers he got from the court. The papers all went down to his late mother's house, since the loan was in her name, and I didn't see them, or I would have taken steps to stop it. (He also let her house go into foreclosure and lost it at auction last year. Yes, an idiot.)

The first I heard of it was when he told me that the house was due to be sold at sheriff's auction. Frantically, I looked on line and he declared emergency bankruptcy with less than 24 hours to go before the sale. He then went through Loss and Mitigation. Right now, they want to refinance the loan but the loan is STILL in my late mother in laws name, even though I have sent them 4 copies of her death certificate, and called them 7 times to explain the situation.

I don't even WANT this house any more because I can’t stand it, it needs major repairs, and our next door neighbor is crazy and keeps gossiping about us all over town and is showing an unnatural interest in my pretty 19 year old daughter.

We saw a house in town that we love and can get for $65,000.00. Unfortunately, I don't have much money at all, since I had to pay off a few creditors after my husband died unexpectedly in February.

Right now I am not working; I lost my job early in 2008 after the company I worked for went out of business. I have been applying for jobs ever since without success, and believe me I'm not picky. I don't have a very good credit history right now, since my late husband and mother in law took out credit cards in my name after we moved and the applications came to my mother in laws house (where we had lived) and they filed them out, maxed them out, and never paid on them. (My husband told me at first it was my mother in law who took them out herself, telling me this after she died, then late in January he confessed that he had taken them out with her too, (Believe me when I say if there hadn't been a death there would have been a divorce)). So I don't know if that's why I can't get a job or if it's my age. (I'm in my mid 50's and a lot of companies are hiring younger people now.)

My 22 year old son, who is out of school and working, and my 19 year old daughter who goes to school and works part time live with me, and I get a Social Security check for me and my 12 year old daughter every month. We want this house very badly, I can't sell mine right now because it needs too many repair jobs, which my husband never did, and I don't have the money to have them done.

We really want the other house. Is there anyplace we can get a loan in our situation? Anyone who can give me some good advice, (and not smart mouth me about my situation, or my horrid late husband and his equally horrid mother), I would so appreciate it. This house is driving me to despair and I so want to start out in a new place, fresh away from any reminders of my late husband and away from the hideous neighbor. (This reads like a bad movie, I know, but it’s all true.) Thank you!

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  • 1 decade ago
    Favorite Answer

    You need to rent for a while. You are in no condition to assume a loan even if a lender were to grant you one. How would you ever keep up the payments and maintain the house without a job?

    I don't want to be cruel but the most sensible option you have is to forget about home ownership until you are able to clear up this mess and find work. You realize that if the mother-in-law applied for credit cards in your name that this is fraud? Have you reported this to the police in spite of her being deceased? Have you disputed the credit card charges on those cards?

    You have a lot of unpleasant work to do. Sorry.

  • Anonymous
    4 years ago

    The issue is not that you are making your payments on time each month, but that you aren't making an effort to pay off your creditors who you still owe in the past at all. That should be priority one and if you look at your credit report each creditor will likely include a phone number for you to call to try to work out a deal to pay off in full or work out a payment plan to become current on the debt. If you don't have the money to pay these old debts, you are not in a position to get a mortgage. The FHA rule is that you need to pay off all of your old debt (very old medical can sometimes be overlooked) except for up to $1000 with no single item of debt more than $100. Or become current on old, present and future debt with no late payments for 12 consecutive months. Since you have no income the loan will have to be in your husbands name only so only his credit report (and debt) will matter. What he should be making doesn't matter. All that does matter is what he actually reports to Uncle Sam. If his income has fluctuated an average will be taken in consideration for the loan. The steady pay he has had in the past 4 years is a good thing. With a little work, you can achieve your goal. Priority 1 is to either pay off old debt on HIS credit report or become current on that debt. Good Luck!

  • 1 decade ago

    There ARE local lenders who will still originate loans for people with poor credit. Most lenders require a minimum of 620 credit score. They also do not like to see any late mortgage payments in your recent credit history. You can review more loan options for poor credit here.. http://www.dreamhomefinancing.com/LoworNoDocumentL... or you can search the internet for more information.

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    1 decade ago

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  • 1 decade ago

    Home loans for bad credit are for people who find it difficult to get loan facilities due to poor credit ratings. However, people with bad credit may have to deal with several difficulties at times and they also pay slightly higher interest rates for the loans. One of the best ways to increase your chances of getting a home mortgage loan if you have poor credit is by improving your credit history. Besides, you can get in touch with some good sub prime lenders who may be able to assist you in getting the best deal in getting such loans.

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    There are many reasons why anyone can get a negative credit history, which includes overspending and lack of proper financial planning. Many of us fall into a debt trap owing to excessive use of credit cards, which can sometimes put a strain on financial resources and result in late payments. These last payments impact on our credit scores.You can improve this situation by prioritizing your needs well and set some money aside, which can be used to clear off your debts on time.

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