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Samoan said:
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turbodog said:
Your credit rating will take a hit if you apply and are turned down. However, you may check it yourself as many times as you want w/o an impact. If you want to play it really safe, get your own report and take it to a lender. Ask them for an opinion before they actually pull a report themselves. That way you have your own report anyway.
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Whoa there,
Where are you getting your information? Your first comment about a rejection causing a hit on your credit is just plain wrong. With the exception of a line on your bureau matching up with an inquiry, the decision made by the lender never makes it back to your bureau. If you are requesting a free copy of your bureau based on a decline you will generally need the adverse action letter from the lender. Too many inquiries, regardless of decision can cause your score to fall a little.
You are correct that checking it yourself does not count against you.
Asking a lender "for an opinion" on a bureau that they did not pull is a waste of time. You will get just as much information by simply knowing your FICO or Beacon. And this information is not much. Be carefull of a lender that is willing to give you too much information based on a bureau you brought in. Their story *will* change once they pull their own and you can bet it will change in their favor.
One main thing to keep in mind is that your score has two primary components. History and capacity. History is simple enough. Do you pay your bills and do you pay them on time? If it's yes then you will have a strong score here. Any dings on your credit? If so they mean less if they're over 24 months old. If they're over 60 months old many true risk based lenders ignore them altogether.
Capacity is basically a ratio of your revolving lines to your limits. High balances and low limits make for a low score. Low balances and high limits make for a high score. A lot of people make their biggest credit mistakes here. They get all proud of paying off all their credit cards and cancel them all. Say goodbye to 30% of your score. Pay 'em off and cut them up, but do NOT cancel them.
The remaining credit score it things like trade lines opened in the alst six months (fewer = better), history of oldest line (longer = better), and amount of secured vs unsecured (high secured = better).
As for the OP. Land loans are a PITA. Generally you are looking at bare minimum 10% down with rates in the 8-12% range. If you can get together 20% you can knock a percent or so off your rate. Keep in mind that land loans are not mortgages. With a mortgage if you can't put together 20% down you simply get hit with PMI. For a land loan if you can't get a decent down together, you don't get the loan. Also, as someone else mentioned, plan on another 2-5% for closing costs. If you're cutting it close on the down payment, you'll be paying these out of pocket at the close...or you can pay a higher rate in exchange for lower or no closing costs.
Finally, you mention that a big portion of your "income" is a truck and a place to live. This cuts both ways. On the one hand your debt to income ratio will be quite low as you are not paying for things that most people pay for. On the other hand don't even dream of counting it as income. Finally, for most people, if they lose their job their expenses stay flat for secured items, call it overhead. In your case you are "paid" in these things. If you lose your gig all of a sudden you have to start paying for these things. A loan officer *will* look at things like this and regardless of your score can cause you to be non-conforming and be declined. In addition, with only two lines(according to you) on your bureau you would be considered a "fragile A" (or A+ or 800+, whatever). You will generally get the rate of a high-risk borrower.
-F
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Yeah, after looking at what I wrote again I can see that I meant one thing and wrote another. I meant to say that inquiries (other than your own) are generally bad. If the inquiry results in a loan (the land) a future lender will not have a problem with the inquiry. However, if you are turned down, then you have an inquiry and no good came of it. That's what I meant, not that a decline was in itself a negative hit.
Buy the land. Put up your car or something (flashlight collection) as collateral.
Generally when someone says this they mean that they are not telling the government that they made that money and therefore not paying taxes on that income.
