probably a silly question...building a house

ok, I have talked about this in the past on this very website and I got some great advice and a few posters turned me onto some great ideas about how to go about things....

I have purchased 10 acres of land in the country.....my credit is weak, I know banks could care less about why I have bad credit but its not like I was irresponsible from lack of a brain, it was lack of money, a wife that was working full time and going to school fulltime while getting no assistance from the govt, we had to pay for her school......we both have been employed with the same employer for over 12 years....different employers but we have both worked at the same place.....have little to almost NO debt...vehicles paid off next month and we live in a house for free that is owned by family....only debt we have is utility bills.

OK, how do we go about getting a loan to build? I have shopped around at different banks and they just really want no part in us. We have spent a few thousand dollars with those credit builder companies to no avail, they took our cash and pretty much did very little....but anyhow, where can we start.....we are paying for our land on a land contract, we have about 20-25k in equity in the land if we can get it in our name.....we might be able to come up with about 10k in a down payment if needed, but would not like to if there is a way around it.......

I know some on here are into this type of field so if you have any suggestions or ideas, I am open to anything...my kids are 5 years away from going to college and we would like to get this done before then so we can build some equity......I am open to anything....

I just get frustrated with all these banks looking at me and my wife like we are bums who dont pay bills.....matter of fact, we file for bankruptcy back when my wife was still in school and we continued to pay off every debt we had except for our home and we got it sold for our payoff so we really left very little debt on the table....we kept paying off our cars and we paid off everything except credit cards which was under 5k. And on our credit cards, we paid everything off except interest....we put the interest in our bankruptcy, our lawyer advised against it, said to let all debt go and let someone else worry about it.....but we didnt want to do that.....we felt responsible for our debt so we paid all we felt we could.....I just hate that these banks look at us 5 years later like we are trash. We have actually been laughed at by one bank. one thing we could give up but dont want to is tithing at our church....we try and almost 100% succeed in tithing each and every month at church.....it just sucks to have these banks laugh us out of their building when we feel like we are financially in better shape than most of the population yet because our credit score says one thing, banks sterotype us into one category........

anyone got any ideas? I know this is a shot in the dark but there are some smart people on here, so I am all open for ideas.

Go here and ask the same question:

http://creditboards.com/forums/index.php?showforum=9

It's a great board for that sort of thing, helped me with some things.

That is a tough one, you might be better off stopping the tithe for awhile, until you get your feet set. You can still donate to the church, but a firm percentage, when going through tough financial issues is tough. There are two other things to give your church instead of Treasure if you are uncomfortable cutting back, Time and Talent.

Have you tried other sources of financing besides "banks" such as credit unions? You have "land" perhaps you should try Farm Credit Services.

What kind of house are you wanting to build? will it have a basement? Have you considered a log cabin? How much are you looking to spend? Is the land paid for? If not, how much do you owe? is there a road to where you want to build, or is that going to be factored into building costs. Have you looked at construction companies or designers?

As for your credit, I like the Dave Ramsay principal. It sounds like your credit is poor, but your current money situation is not. Skip tithing. pick your lowest bill and pay it off completely. keep doing that until you are debt free. Once your vehicles are paid off, If you can do 20% down on the loan you want, most places will finance. But if you are bulding, you have to alot for cost overruns. that's the difference between building a new home and buying an existing home.

Have you looked into buying an old home and having it shipped to your land?

Just some thoughts. good luck!

I have no debt outside of a few 500 credit cards...2 of them...I can pay them off in 2 months...I owe 55k on my land and its valued at 80k....other than that, land is ready to build on and move in....just needs water and septic, electric is on site, just need to come from road to spot where I want to build.....

credit scores are right around 600 and noone wants to loan anyone money without a 620....we qualified for a loan but it had to be on less than 2 acres of land and now that program is not offered anymore...

I am just sick of banks looking at us like we are deadbeats and we make decent money and have no debt, both have great jobs with security....I want to spend my money and put it into the economy but they wont let me...

Creditboards is a wealth of info....thank you to who linked that site to me...I have already learned a ton in just one day...I can see myself getting addicted to that site...

I am open for advice, suggestions and whatever else you guys might have that helps. even a slap in the face to wake me and realize I am stupid and need to just buy a van and live down by the river.

Quote:

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Originally Posted by lidspinner

just needs water and septic, electric is on site, just need to come from road to spot where I want to build.....

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Have you met with a builder yet to discuss building a house?

I am in construction and with what you have posted above, kinda throws up a red flag that it may be potentially very costly.

Quote:

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Originally Posted by lidspinner

I have no debt outside of a few 500 credit cards...2 of them...I can pay them off in 2 months...I owe 55k on my land and its valued at 80k....other than that, land is ready to build on and move in....just needs water and septic, electric is on site, just need to come from road to spot where I want to build.....

credit scores are right around 600 and noone wants to loan anyone money without a 620....we qualified for a loan but it had to be on less than 2 acres of land and now that program is not offered anymore...

I am just sick of banks looking at us like we are deadbeats and we make decent money and have no debt, both have great jobs with security....I want to spend my money and put it into the economy but they wont let me...

Creditboards is a wealth of info....thank you to who linked that site to me...I have already learned a ton in just one day...I can see myself getting addicted to that site...

I am open for advice, suggestions and whatever else you guys might have that helps. even a slap in the face to wake me and realize I am stupid and need to just buy a van and live down by the river.

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If you haven't already, go to annualcreditreport.com. its a once a year free service that gives your credit history from the three credit reporting services. for and additional $5 per service, you can get your score. Find out what is dragging your score down, and see how long delinquent or old accounts have been on your credit. write letters the the reporting services requesting they review your score. often they will if it is well written and details your current financial situation.

Definitely agree with the idea of meeting with a builder once you decide on the type of home you want. get a magazine from lowes or home depot that is all about house plans and designs. they run anywhere from $5-15. Once you settle on that, it will be easier to pick a builder.

Pay off everything you can.

Part of what boosts your credit score is actually using your credit and using it in a fashion "they" consider responsible.

In order for FICO to give you credit for credit card activity, you need to have a balance on the card to be reported; but I want to pay it in full each month( so no interest). To accomplish this, I just created a "Gas" sub-acct with my credit union and seeded it with $200 to start. Money trickles into this account when my checks are deposited to pay for the next month's gas.

Now I charge the gas during the month and my scheduled payment goes out after the balance is reported, but before I get any interest charged. I show activity on all my cards and ensure each one of them has a stellar payment history. I simply used a sharpie and wrote 1,2, & 3 on my cards so I know which order to use them in. Once I have used the card that month I just put it in my wallet backwards so I know I have used it. Anything logo facing out is still in play. If I need to fill up more I go back to cash/bank card.

Once you establish this it's second nature in a few months. It won't help you in the very short-term, but it's very good for your long-term credit and very easy IMO.

GL

Have you considered a manufactured home? Or a smaller home that you could expand when you are eligible for a bigger loan?