Possibilities and our situation???

Any general questions you might have in regards to loans and finance.
JUSTWONDERING
Posts: 1
Joined: Mon Apr 12, 2010 8:01 pm

Possibilities and our situation???

Postby JUSTWONDERING » Mon Apr 12, 2010 8:10 pm

Hi

I am just wondering what possibilities are open to us.

My husband and I had a business go under 3 years ago; unfortunately we had large debts to pay and have nearly successfully paid them (over $500,000 worth). We had one glitch on our credit rating, of a bill that we knew nothing about - however have paid this, and have been advised that a note was attached to the credit rating advising that we did not know about this debt; and it was paid immediately; we are hoping that lenders recognise this comment, as we have paid everything we owed + more. fingers crossed.

We have plans to get into our own house again within a year. We are aiming to have $20-$30,000 saved by next June at which time we would liek to do one of two things;

1) We are currently living with my in-laws on 100 acres, which they have offered us to buy 10 acres off them; and build a house here. Which we would love to do. As we are unable to sub divide the property in the area to less then 100 acres, we are not sure how this would work with getting a mortgage to build a house here - is this possible??? What would be required for the banks to look at us?

and if this isnt possible

2) we can buy our own land and build our house on our own land.

option 1) we would be looking at spending around $400,000 and option 2) around $500,000 if we were to build on the new land. what sort of deposit is required.

My husband earns $1900 a week guaranteed. I am studing to be a teacher; however should be qualified and teaching by the time We apply for a mortgage (starting wage by then will be approximately $60,000).

If you could advise on the liklihood of us getting a loan, and what depsot we should be aiming for that would be wonderful.

Thank you again,

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Otto Dargan
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Re: Possibilities and our situation???

Postby Otto Dargan » Tue Apr 13, 2010 9:01 am

Wow this is a complex one! Just to let you know even if a default is paid immediately and if you were unaware of the bill then lenders will count it against you when you apply for a loan. In particular this will be a problem if you are borrowing over 80% of the property value. The guidelines for defaults are so complex that it would be impossible for me to be able to give you an accurate estimate of your likelihood of getting approval without going through your full situation.

Please make sure that your savings is in a bank account in one or both of your names and that there are regular contributions to it rather than large one off payments. Then it would be counted as genuine savings.

1. For option one you could not subdivide so instead you would have to buy 10% of the the property off your parents. In other words you would all be on the one title together and all of you on the loan. Likely the total loan would be less than 80% of the value of the property so this option would work from a loan point of view, it would just be a little messy as your parents would have to be on the loan too.

2. For option two you would either have to remove your default to qualify for a loan or find a way to reduce your loan to 80% of the property value (depending on how bad your credit history is).

I hope that helps. Good luck with your new home next year.
Otto Dargan
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