Should I app for Navy Federal?

Anonymous · ‎03-21-2019

This is going to be lengthy, bare with me...

My goal is to buy a home before the end of the year. My credit is to a point where we can do an FHA, but my fiancé (whom I’m buying the home with) is still not in lendable range. The thing that’s killing him is his utilization. He has open TL but they are secured products with low limits. All zero balances BUT we both have closed NFCU cards with high balances. Those are killing his utilization.

Me- 8000/10,000
Him- 8000/10,000
Shared card- 8000/10,000

I have higher limit open revolvers so my utilization is fine even with those closed cards. They were all closed voluntarily (not CO) as an agreement to reduce our interest rates to 6%. That being said, we aren’t worried about paying them off immediately. We just need to bump my fiancé’s score so we can get our loan.

My idea is, get a navy federal card with a few thousand limit and add him as an AU.

My questions are:
1. Will Navy approve me with my scores? (EX in sig is updated as of today. EQ and TU from earlier this month, not reflecting several thousand paid off on open cards. These are all FICO 8s which will be different from Navy’s scoring model).
2. Will Navy approve me when I have the remaining debt on two closed cards with them?
3. I have a secured card with Navy that’s 13th statement cuts next month (opened after the two cards were closed)? Should I wait to see if that unsecures or app for unsecured before that cuts?
4. If applying is a good idea, which product should I apply for?

SlideOrInsert · ‎03-21-2019

"That being said, we aren’t worried about paying them off immediately."

Why would you not worry about paying off $24000 in debt before taking on several hundred thousand in more debt?

What are your incomes? Pay off your revolving credit debt and scores will improve.

"My goal is to buy a home before the end of the year."
"If applying is a good idea, which product should I apply for?"

Even if the above advice is ignored, I thought the general consensus was that it was not a good idea to seek out credit months before making the biggest credit application of a lifetime.

9/2022
$30000

8/2020
$20000

12/2018
$30000

8/2016
$30000

3/2016
$21000

5/2014
$20000

10/2007
$8900

Anonymous · ‎03-21-2019

Exactly right - zero out as much debt as possible both to free up income that can be put toward a mortgage, and to max out your mortgage scores (which like seeing CCs with zero balance). And the general concensus is do not app for any credit in at least the 6 months leading up to a mortgage app, while 12 months or more is even better.

Anonymous · ‎03-21-2019

Does he have a family member that can add him as an AU on one of their older cards? That could help with utilization and not require either of you to apply for credit.

Anonymous · ‎03-21-2019

@Anonymous wrote:
Does he have a family member that can add him as an AU on one of their older cards? That could help with utilization and not require either of you to apply for credit.

This would still count as a new account would it not?

Going into a mortgage with a lot of debt isn’t a good idea, I would pay off as much of it as possible before.

Anonymous · ‎03-21-2019

It’s not that we aren’t worried about that debt. We plan to pay it off next year. But due to our renting situation we need to buy a house ASAP. So instead of putting our funds towards that debt, we are putting it towards a down payment and closing costs.

Our lender actually advised him to get another credit line in his name and once he did that the AU accounts would benefit him.

Anonymous · ‎03-21-2019

Depends on whether or not the creditor gives him the history of the account. Unfortunately, his family has worse credit than him so it’s not an option.

Anonymous · ‎03-21-2019

Speaking from my experience. My wife had debt, I had none. I was in the range to get a mortgage but she was not. I did not have much debt with the exception of my car $16000, student loans for $19000 and $300 on a credit card. There was one charge off on my account, and once I explained the situation, they looked past that. However, applying for a mortgage, because her credit was not good they could not use her income. But her debt became my debt. Even though the debt was incurred prior to her and I being married. My income supported the said loan with just my debt and my accounts being at 21% DTI (under 40% I was told I was good), but with her it put me in a position where without paying $9000 in debt I would not be approved for anything. I am a veteran and was using a VA loan, also attempted a traditional FHA loan, both being denied because of her numbers. With the numbers that you are showing, it will be difficult if not impossible to get a mortgage. The DTI is extremely high and that will be a major factor. Best bet is to pay off the debt which you have incurred which will in turn help your scores. YMMV, everyones profile is different no matter how similar they look. But this was my experience last year attempting to get a mortgage.

Anonymous · ‎03-21-2019

Maybe I’m not understanding this - you have card(s) with NFCU that are closed and in some kind of hardship program basically to the tune of many thousands of $$ that you aren’t paying off in anything close to large chunks and you want to open another account with them?

I understand your endgame - reduce utilization by increasing aggregate CL, but I’m not sure NFCU is going to give you another unsecured card.

Anonymous · ‎03-21-2019

Well, against all of your wonderful advice I applied anyways. I got denied and sent a recon message and just got a message that I was approved for 25K! This has got to be some sort of error.