Negotiate a Debt Settlement

Debt settlement program & Mortgages....?

My husband and I have been in a debt settlement program for almost a year. We have enough money to settle all of our credit card debt but are told to stay in the program for awhile longer. Our rent lease is up at the end of the year and we are currently looking into purchasing a condo. Is it possible to qualify for a mortgage while in a debt program?

Public Comments

1. who is telling you to stay - the debt program - because they make money every single month you're in it. Get out of it, pay off your debt, shake the dust from the shoes of the program and move on - Being in a debt program in and of itself doesn't qualify or unqualify you for a mortgage - however, having late pays does, and once everything is paid off, you'll have at least 3 "on time" payments on your credit report, which will lift your FICO score - the goal is to lift your FICO score at much as possible - BTW, don't close those accounts after you pay them off - having them open with zero balances shows that you don't spend up to your credit limit and will give you FICO points. Also, don't open any store credit cards, no matter what discount they purport to give you - it temporarily lowers your credit score by reducing your total available credit.
2. I have a friend who did a bankruptcy, he was able to buy a house with a mortgage and then refinance that mortgage a few years later. The mortgage he got after the bankruptcy (2 years later) was at a higher rate than most people pay but still reasonable. Mid 6's I think. He then refinanced two years later in the mid 5's. I'd guess that you'd be able to find someone who can help you obtain a mortgage but the rate might be higher.
3. I don't think so, debt settlement ruins your credit. I think you should pull out of the program and save your money. The banks will still fund you even if you owe. Rebuild your credit, do not check your credit all the time, it lowers everytime you look. Keep three major credit cards active and use every month. At the very least PAY THE MINIMUM. Do not be late or miss a payment, you'll be ok after a while. If you can afford it, buy a single family. Condos make you pay an HOA due. It's a rip off, in my humble opinion. So get out of the program, they lie!
4. Something doesn't sound right, I was in such a program and when we paid everything off our account was closed, with a thank you and good luck.
5. FIrst, let me say that I am a Dave Ramsey fanatic. You can look for his money advice radio program schedule for your area by going to daveramsey.com. As I understand Dave Ramsey in addressing this issue before: These debt settlement programs are a rip off. They are pros at stretching out debt. Pay off your debt as quicly as you can. And as Dave would say "The borrower is salve to the lender." So whatever it takes, get this debt paid off and do not allow them to jerk you around. Personally, I would not even give them the satisfaction of paying the final payments....I would be so proud to do that, that I would call the companies up and do it myself. I would also recommend that you call the Dave Ramsey show, or email. Your question may be answered on the air. God Bless
6. Your lender is telling you to stay a little while longer because they want you to continue pay interest on your credit card debt as long as possible. If interest rate on your debt is 12%, and you pay about $1000/month into the debt, that's over millions of dollars of interests you will be paying in a 30 year period! If you are able to pay it off right now, then do it. It will save you thousands of interests in the long run. You maybe able to qualify for mortgage. Go see if you are pre-qualified to get one. If you are chosing a mortgage, make sure its either ARM or a 30 year fix. You should only take ARM if you plan to live in the home for less than 10 years.
7. No. Conventional mortgage lenders look at debt settlement (and Consumer Credit Counseling) just like you were in Chapter 13 bankruptcy. You will need to get out of the program before you can qualify for a home loan--either quit or finish it. That being said, FHA does allow people to enter into mortgages while in Ch 13. However, you must have been in at least two years, made all your payments on time for the last twelve months, and get permission from the trustee. Rick Lanicek www.primelendingonline.com
8. debt program are treat by the lenders the same like bankruptcy chapter13. if you have money now, pay your debts a.s.a.p and try to talk with qualified loan officer about loan available to you. if you can afford the mortgage payment, buy if not wait 12 mts and try apply later . hope the market will not change much.
9. Some good advice already given, but... I could answer those questions online for you if your interested. I'll need a few more details and I could price out this scenario for you. Antal Surefast Mortgage Follow this complete link: http://gabbly.com/http://www.surefastmortgage.com/ Online Questions Answered for Free: Mon-Fri 8:30-5:30
10. rlanicek is correct. You would be going sub-prime, and not being able to go conforming, but you can get into a home loan. There are many companies out there what would finance you - ok. You would have to show proof of 12 months with most lenders. There are some that will not need it, but most do. The debit consolidation hurts a person (looked at as a chapter 13 to Lenders, even though you are paying it off). Sorry, but the truth. Pay off what you can, ok, if it is medical, medical can stay open on your credit report, pay off the others that is not medical. Talk with a experienced Mortgage Borker - ok - one that deals in credit issues. When you talk to a broker, ask him/her how long they have been in the business, as a LO (Loan Officer), it is best to get one that is seasoned, one that has been in the business longer... Also consider the following: Lenders look at the middle score to qualify a person - and if your credit is low, than you will be going SUB-Prime, and any amount over 80 percent does not have MI - There are alot of companies I underwrite for that does NOT charge MI - normally the rate is slightly higher. Say you got qualified and your rate was 8.50 at par (Par, means that is what rate the lender quotes you, with no addon's to the rate for the lender to make pts on the back - some Lo"s add pts on the rate to make their money - instead of charging it up front). The 8.50 does not have MI included. FHA loans have MI included, Conforming A+ borrower's loans have MI included, but the rates are better starting in the mid to high 6's (with rates going up.) The more money you borrow - the higher the rate normally. There are alot of factors involved. With a government loan - collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true.... ALSO - Example: Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok - It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thur a realitor, and the seller has to pay the realitor their fee which runs from 2-6 percent of the selling price, and you ask for 4-5 percent toward closing cost -assistance) Follow me so far?? Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. Try to find someone (broker) that will pull your credit one time, and submit your loan application to company's that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only - not the final - but it does help you figure things out. Good Luck, and if I can help in any way check out my web site, for links to all the credit reporting agency's and other useful information.
11. I do not think so unless you have a good down payment.
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