Poor Credit Clouds Hopes For a Bargain

Mark Dozier and LaSharn Belt earn $168,000 combined and are figuring on a $4,000 monthly payment.
Mark Dozier and LaSharn Belt earn $168,000 combined and are figuring on a $4,000 monthly payment. (By James M. Thresher -- The Washington Post)

By Dina ElBoghdady
Washington Post Staff Writer
Sunday, March 25, 2007

A few months ago, Mark Dozier started shopping around for a home mortgage so that he and his fiancee could move out of their apartment in Bowie and into a house of their own this fall.

But the best his mortgage broker could do for him was a loan with a $5,000 monthly payment. Even the broker advised against it.

"He was very upfront about it," said Dozier, 36, who works for a government contracting firm in Crystal City. "He said: 'This is the worst loan you can possibly get.' "

Financial planner Barry Glassman of Cassaday & Co. in McLean doubts that Dozier can do better than that today, if he can get a loan at all.

Dozier's choice of mortgages is limited mostly because of his credit score, which is the three-digit figure that lenders use to decide how likely a person is to pay back a loan in a timely manner. The more risk a person poses, the less likely that person is to get a loan with a low interest rate and favorable terms.

By that measure, Dozier is a risk. He filed for personal bankruptcy in 2000, which wrecked his credit record. A divorce later that year further squeezed his finances. Some late payments on bills since then have added to his credit woes.

Still, with the bankruptcy years behind him, Dozier was optimistic about his chances of buying a $600,000 house in central Prince George's County soon after his apartment lease ends in October.

When he spoke to Glassman, however, his hopes dimmed.

"Strongly consider waiting," Glassman told him. "You need to hold off on buying a house for another two or three years. By the time you're 40, you can be in a single-family house that you can afford."

Dozier earns about $103,000 a year. His fiancee, LaSharn Belt, is a consultant for a Web provider and earns about $65,000. Her income alone cannot support the kind of house they want.

So why the rush to buy now?

"In this real estate market, we wanted to take advantage of the fact that many [sellers] are paying closing costs," Dozier said. "Our goal is to get a mortgage around $3,500 to $4,000 a month and I could handle that payment. . . . My fiancee can handle all our living expenses."

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