Any mortgage loan experts out there? HELP

[Newt]

My BIL is trying to buy a house, but is having problems finding a mortgage. From what I've researched he quilifies for a Section 502 Rural Housing Guaranteed loan but none of the brokers he spoke with have given this option.

He has $4000 to put down. He does have bad credit (score about 590 from what he told me) and is having problems becaues he was self employeed for a period of time (he has all income records/tax forms going back 5 years.) He has an error on his credit (a BIG error I might add) but is inquiring to have it fixed so his score should go up into the 600's.

The house he wants to buy is $29,000.

Will he quailify for a 502? Is he out of luck with such a low credit score?

His current broker told him to stop shopping around because it will lower his credit score even more, but I thought that all inquires for a mortgage was considered as one "ding" as long as they are made within a 45 day period. He wants a 30 year fixed.

Any help out there for him?

 

[R1_Ridah]

My BIL is trying to buy a house, but is having problems finding a mortgage. From what I've researched he quilifies for a Section 502 Rural Housing Guaranteed loan but none of the brokers he spoke with have given this option.

He has $4000 to put down. He does have bad credit (score about 590 from what he told me) and is having problems becaues he was self employeed for a period of time (he has all income records/tax forms going back 5 years.) He has an error on his credit (a BIG error I might add) but is inquiring to have it fixed so his score should go up into the 600's.

The house he wants to buy is $29,000.

Will he quailify for a 502? Is he out of luck with such a low credit score?

His current broker told him to stop shopping around because it will lower his credit score even more, but I thought that all inquires for a mortgage was considered as one "ding" as long as they are made within a 45 day period. He wants a 30 year fixed.

Any help out there for him?

As for the credit report. He should attain the copy and show that to other lenders. I believe that is good for a certain length of time. If he does not provide a report than they will run another credit check and that will cause an "inquiry" and affect his credit report.

 

[Newt]

As for the credit report. He should attain the copy and show that to other lenders. I believe that is good for a certain length of time. If he does not provide a report than they will run another credit check and that will cause an "inquiry" and affect his credit report.

He has a copy of his report and scores from all three companies. However, each lender pulls their own anyway.

I thought there was a provision saying that credit inquiries regarding mortgages or car loans are only considered one inquiry (who doesn't shop around for the best rates/lenders?) as long as the different inquiries are made with-in an 45 day period. In other words, no matter how many lenders my BIL goes to that pull his report for a mortgage (with-in 45 days) it should only count as one hard pull ("ding"). That will not bring down his score much, unlike what he is being told (each pull is a ding.)

Has this changed?

 

[cichlaguapote]

Has this changed?

I'm not sure.. I thought it was less time than that though. Thought it was as long as they're pulled within a 15 day or so time frame it doesn't affect it.

It honestly doesn't sound like a hard loan to get, unless they won't touch him because of the whole sub-prime fallout recently.

I know locally here there are mortgage brokers who specialize in sub-prime/self-employed/situations where it's normally harder to get approved. Has he looked for a company similar?

 

[R1_Ridah]

He has a copy of his report and scores from all three companies. However, each lender pulls their own anyway.

I thought there was a provision saying that credit inquiries regarding mortgages or car loans are only considered one inquiry (who doesn't shop around for the best rates/lenders?) as long as the different inquiries are made with-in an 45 day period. In other words, no matter how many lenders my BIL goes to that pull his report for a mortgage (with-in 45 days) it should only count as one hard pull ("ding"). That will not bring down his score much, unlike what he is being told (each pull is a ding.)

Has this changed?

Hmmh..when I purchased my home and was looking for home loans I had the first place that ran my credit report give me a copy. Thereafter each and every other place I inquired with I gave a copy of my credit report. I was firm that they DO NOT run my credit again because of the reason you mentioned. Perhaps every state differs? I'm in California.

BTW - how about an FHA loan? is he a first time buyer?

http://www.fha.gov/buyer/loans.cfm

 

[Newt]

The Section 502 Rural Housing Guaranteed is a FHA loan. He is a first time home buyer. The home is in a (very) rural area, non farm, and he meets the income guidelines. That's why I was surprized when he told me not one of the lenders he spoke to mentioned it to him.

 

[armac]

what is the big error in his report, that sounds like the deciding factor.

also consumer credit is harder to obtain, in his case he is looking for "sub-prime' that whole market has gone away in the last year.

 

[Newt]

The big error was a home equity loan reported as being over 90 days late. Only problem is he never had a home equity loan, (don't you first need to have a home to have equity in to get a H.E. loan?)

He is getting that removed and that should bring his score up. He can't understand why he is having such a hard time with this, he has purchased trucks that cost more than this house and has paid them off.