My wife and I are going through a very difficult time with obtaining a pre-qual due to our credit scores. Our current home is on the market and the house we want to purchase will need to be built. We live in Austin, TX and the housing market is on the up. Our area is a hot spot right now so we feel confident that we will be selling soon. I have been doing very well in my job/career and this home was our first. Now that our finances have improved and we have 2 children, it's time to move up and into a better neighborhood.
When we bought our first home in 2005, the rules were a lot different. Now it seems next to impossible to get a home loan. I have a friend of mine who is a mortgage broker and he's been helping us but I'm really starting to worry. The biggest hurdle we have right now is credit. We hired a credit repair person last August and all he's done is dispute items and was successful in removing a few old items. Since lenders need the disputed items removed, we've had to go back and personally request them to remove the disputed status...so the credit repair person was not much help. For the last 9 months, we've been shooting for a 620 score because that's what our mortgage friend advised us to aim for. Well we just found out last week that with a score of 620-660 we'll need a 20% down payment + closing costs, with a 660 we can do a 80/10/10 (10% DP) and with a 680 or better we can do a 80/15/5...5% being our DP. Just to get personal for a bit; I gross $108K per year, excluding bonuses, etc. My wife works part time and brings home about $12K during the school year. We have never been late on my wife's $500 car payment...that will be paid off in October. We've never been late on our home loan...we have some credit card debt; 3 cards with a credit line of $300 (yes, 3 hundred dollars) each. Those have been paid down to a 10% balance. There were a couple of old collections on our reports; maybe 2-3 with a combined total of $300....again these were all old and have been paid off. The last time we pulled credit was in March our scores were: for me - 584, 531, 525; my wife's - 621, 588, 571.
Again we've paid everything down or completely off. We left the 10% balance on the credit cards because we were advised to. My wife and I both use myfico.com score watch and her score on the fico site is 617 and mine is 603. These should be going up again soon but we just don't know how much it will increase.
I'm sorry to keep rambling but we have nowhere to turn. No one can give us any hard information or lead-times. Everything is a guess or a vague assumption at best. Our house is on the market and will probably sell soon and then we find out last week that we need our scores to be much higher than the original 620 goal. It's simply sickening and my wife can't get any sleep. What should be a fun and exciting time has turned into a frustrating one. No one will think outside the box for us. No one can look at our credit and say..."do A, B, C and you're there"....no one can say "you'll be there in 30, 60 or 90 days if you do A, B, C". No one takes into account that we make very good money and have no debt, that we have never been late on our home payments, our auto loans, we've paid off 2 cars in the past 4 years. It just blows me away that we can do all these things and make good money and still have a horrible credit score.
I don't know what to do...seriously we're completely lost. I would love to visit (email) with someone that has more answers for us; perhaps some creative suggestions, ideas outside the box...we need some positive hope. I apologize for the long post. I'm thankful if you have time to read it and I'm even more grateful if you're able to reply. I hope you all have a great day!! Thanks again.
Starting Score: EQ 546 TU 566