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Valued Member
Posts: 40
Registered: ‎03-17-2012
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A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

Hello All,

 

I'm just a bit confused on what I need to do or where I need to have my credit in order to qualify for an FHA mortgage...here's the short of it.

 

I have been looking at homes online religiously as a motivator and REMINDER of my goals.. A realtor  contacted me from one of the sites I was browsing..(you had to enter your info to view the properties). I explained to him I was just perusing but looking to buy in the next 3-6 months, right around the time my lease ends. He asked a few more questions then said he'd pass my information to a lending company that works with first time homebuyers.

 

So the following day I receive a call from a rep from New Penn Financial (anybody know them?). Since I wanted to know where I am credit wise and needed my Experian FICO I figured I'd let her pull my credit. After not hearing back from her after two days passed, I called. No answer. So I called the realtor back. He said the rep had to make a quick trip out of town, probably hadn't gotten back yet, and they spoke breifly about me..I have a few things on my credit I need to take care of.

 

The rep calls the following day..she apologized..she was out of town and didn't have all my information with her but she recalled that I had 1 collection I need to PFD and pay down a credit card and would call me back Monday with more information.

 

Yesterday I received a denial disclosure in the mail. This is the jist of it..

 

Name of Score: EXPERIAN/FAIR, ISSAC (VER.2)

Credit Score: 0635 Range: 320 to 844

Key Factors effecting the score:

SERIOUS DELINQUENCY AND PUBLIC RECORD FILED OR COLLECTION FILED

NUMBER OF ACCOUNTS WITH DELINQUENCY

PROPORTION OF LOAN BALANCES TO LOAN AMOUNTS IS TOO HIGH

TOO MANY INQUIRIES LAST 12 MONTHS

 

Name of Score: TRANSUNION/FICO CLASSIC (04)

Credit Score: 661 Range: 309 to 839

Key Factors effecting the score:

SERIOUS DELINQUENCY AND PUBLIC RECORD FILED OR COLLECTION FILED

TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

NUMBER OF ACCOUNTS WITH DELINQUENCY

LENGTH OF TIME SINCE DEROGATORY PUBLIC RECORD OR COLLECTION IS TOO SHORT

INQUIRIES IMPACTED THE CREDIT SCORE

 

Name of Score: EQUIFAX/FACTA BEACON 5.0

Credit Score: 0635 Range: 33 to 818

Key Factors effecting the score:

SERIOUS DELINQUENCY AND PUBLIC RECORD FILED OR COLLECTION FILED

NUMBER OF ACCOUNTS WITH DELINQUENCY

TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN

LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED

NUMBER OF INQUIRIES ADVERSELY AFFECTED THE SCORE, BUT NOT SIGNIFICANTLY

 

I do not have any public records filed on any report, however, I have 2 collections, one filed in 2008 for $926 and 1 in 2010 for $1200. The one filed in 2010 is not valid and has been a pain getting removed. The other is a timeshare 'deal gone wrong'. Last year I purchased a car and refinanced this year w/ my credit union. The heavy inquiries are from last year's car purchase. I haven't had any late payments since 2010 and those 2 lates are from Sallie Mae. I have 2 credit cards opened this year in April, Orchard $300 limit and Capital One secured w/same limit, never late. The balance is $5 from both. My only loan balances that are high is the car refi loan that was opened in June.

 

I haven't heard back from her. Now I'm a bit jaded because she eagerly contacted me to get things started and said if I didn't qualify they had a FREE service to help you.

 

Can someone explain the FICO scores (are they real FICO? a lender pulled them)? What should I do to qualify? It looks like my mid score is 646 but I'm still not qualifiable (is that even a word? lol)...Any advice is appreciated!


Starting Score: EQ 593
Current Score: EQ (sw) 635, TU (sw) 661, EX 635 (lender pull
Goal Score: 750


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Regular Contributor
Posts: 105
Registered: ‎10-31-2010
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Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

From this information, your mid score is 635. That is most likely why you were not approved. Most LO's/FHA want a score of at least 640. Others in here will be much better at giving you specific steps. But I know you have a little bit of work to do and you are on your way!
Valued Member
Posts: 40
Registered: ‎03-17-2012
0

Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

Hey CC40! Thanks for responding :-)

 

Ok..so how do you calculate the mid score?Yeah my numbers were off.. I was trying doing math in my head..smh..but I just went back and actually added the 3 scores, 661, 635, 635, then divided by 3 and got 643.6..that would average to 644, right? I thought that you can have a minimum 600 but preferably 620 to qualify for FHA ..I know banks and lenders have their own requirements..my credit union told me I need a 640.

 

The great thing is I can see that I'm closer to my goal than I thought. My Experian FICO score was veddy veddy low..like 523 back in May. I app'ed for a Macy's card to get my score but in hopes I'd get the card too, and of course I was denied.

 

Since I won't seriously be looking until about Dec./Jan., I have more time to get the scores up...I started this journey Feb 2012 at a score of about 590.


Starting Score: EQ 593
Current Score: EQ (sw) 635, TU (sw) 661, EX 635 (lender pull
Goal Score: 750


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Posts: 177
Registered: ‎12-16-2011
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Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

The mid-score is the middle score of the 3. So, out of 620/635/640, your middle score is 635. FHA requires a score of 640 or higher, as far as I know. Your score is just barely there.

 

I would definitely contact the delinquent reporters and see if they will work with you to get those off your report. Also, pay credit cards down below 30% usage, if you are able. That should give you a good bump up. Keep reading this forum for more tips and suggestions.

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Experian Direct PLUS scores: Experian 744/ Equifax 763/ TU 744
Valued Member
Posts: 40
Registered: ‎03-17-2012
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Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

Hi my25 reasons..where are you getting my scores from?..My scores are 635 Exp, 661 Trans, and 635 EQ...am I reading the scores wrong? Look at the credit scores in my original post... The TOTAL balance on from both of my credit cards are $5. I think it's the car loan that's has the high balance since I just refinanced.

 

Being a first time homebuyer is the most frustrating, confusing, and I'm sure rewarding (eventually) process...I just want to find an honest and reliable lender to help walk me through the qualifying process...it's like they just pulled my credit and kept going..

 


Starting Score: EQ 593
Current Score: EQ (sw) 635, TU (sw) 661, EX 635 (lender pull
Goal Score: 750


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Posts: 197
Registered: ‎06-08-2011
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Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

[ Edited ]

cappucino24 wrote:

Hi my25 reasons..where are you getting my scores from?..My scores are 635 Exp, 661 Trans, and 635 EQ...am I reading the scores wrong? Look at the credit scores in my original post... The TOTAL balance on from both of my credit cards are $5. I think it's the car loan that's has the high balance since I just refinanced.

 

Being a first time homebuyer is the most frustrating, confusing, and I'm sure rewarding (eventually) process...I just want to find an honest and reliable lender to help walk me through the qualifying process...it's like they just pulled my credit and kept going..

 


Mid score is the middle of the 3 scores NOT the average of the 3. So 661 635 635 is a mid score of 635. So say your scores were 720 680 650, 650 would be the the middle not the highest and not the lowest.

 

 

TBC

AUDE VIDE TACE :
Starting Score: 684
Current Scores: EQ 796 TU 794 EX 750 (All lender pulls on 2/9/12)
Goal Score: 800 all 3
Valued Member
Posts: 40
Registered: ‎03-17-2012
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Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

AHHHHHHHH TBC!!! OK, got it!! I misunderstood all this time..see this is what I'm saying about being a first-time home buyer..getting the right info is pertinent when you don't know/understand...

 

Thanks for breaking it down...I'm going to call this lender back because THEY should have explained things more thoroughly..she said the AVERAGE of my 3 scores was 635..Hey I'm an educator..key terms take me to another level! LOL!!


Starting Score: EQ 593
Current Score: EQ (sw) 635, TU (sw) 661, EX 635 (lender pull
Goal Score: 750


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Regular Contributor
Posts: 197
Registered: ‎06-08-2011
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Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)


cappucino24 wrote:

AHHHHHHHH TBC!!! OK, got it!! I misunderstood all this time..see this is what I'm saying about being a first-time home buyer..getting the right info is pertinent when you don't know/understand...

 

Thanks for breaking it down...I'm going to call this lender back because THEY should have explained things more thoroughly..she said the AVERAGE of my 3 scores was 635..Hey I'm an educator..key terms take me to another level! LOL!!


Anytime. Search Wells Fargo mortgage on the forms. I think they go as low as 580 but not sure.

 

TBC

AUDE VIDE TACE :
Starting Score: 684
Current Scores: EQ 796 TU 794 EX 750 (All lender pulls on 2/9/12)
Goal Score: 800 all 3
Regular Contributor
Posts: 137
Registered: ‎07-14-2012
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Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

     You need to find a broker that deals with a lender that has a 620 program.  I used Michigan Mutual, they have a 620 to 639 program, it requires you to have 2 months reserves in bank and no gift allowed for downpayment.  Other than that it was pretty simple.

Valued Member
Posts: 40
Registered: ‎03-17-2012
0

Re: A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

Thanks Ron...I'm getting a better understanding now...ok so there ARE 620 Programs out there..I've been doing research on qualifications and debt to income (that's why I refinanced my car..my payment dropped $100 monthly.

 

I'm glad I posted...you guys are the bomb!! Trust me ANY info/guidance is better than none!


Starting Score: EQ 593
Current Score: EQ (sw) 635, TU (sw) 661, EX 635 (lender pull
Goal Score: 750


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