A few mortgage questions

[RW771]

Hi everyone,

I have a couple of questions I'm hoping some of you could help me with. I've been reading through both old and new threads and try to apply them to my situation, so please forgive me if some of these questions have been asked a million times lol.

1. What all can be considered for tradelines? I know this varies from lender to lender, but I'm having a tough time coming up with 3 (what my bank requires). I'll be using #1. Student loan payment that I've been paying on for years, #2. Department store card, #3?. I have two share secured cards, but both are less than a year old. My lender won't allow me to use phone bills, utilities, etc. so I'm desperately trying to come up with a 3rd tradeline. I thought about using carbon copies of my rent checks, but 2 of them were late (my apartment gives you until the 3rd before charging a late fee) so unfortunately, this cannot be used. I'm out of ideas, and that's all I have.

2. Bank statements. My bank wants the past 3 months. I have no OD fees within this time period, but had some prior to then. Is this going to affect getting approved?

3. Down payment. My fiancee and I have been saving for our down payment and the money is in his savings account. I'm getting the approval on my own, so I'm wondering how we can use this money without it having to come out of my bank account. Can this money be gifted to me? I had planned on using some of my TSP funds since several of my co-workers had used theirs for their down payment, but my LO is telling me they don't allow it? I didn't find this out until this summer when I went to the bank, and he had already been saving for the down payment prior to knowing this.

4. Credit pulls. I'm aware that when shopping around for a lender each lender will pull your credit. Is it true that you have a time frame in which multiple lenders can pull your credit without killing your score? I liked the LO I met with back in June but it seems like they're a little more strict that some other banks around here. I was just curious, because I need every point I have and didn't want my credit to get hit each time it was pulled if I ended up checking with other banks.

Thanks for any input you may have. I'll be going to the bank in less than a month and want to have everything ready to go!

[bigman023]

Im not an expert, but I can tell you what I have heard in the past, about 2 of your issues.

1.  I think you should use those carbon copies of your rent payment.  But only if you can also show on your bank statement where you took the money out for the money order.  For mortgage purposes, Ive heard late is defined as 30 days beyond the due date.  Being a couple days late on your rent is not considered late for mortgage purpopses.

4.  I've heard all pulls with-in 45 days are considered 1 pull.  The exception is with Experian.  You only have a 14 day shopping window with Ex.  Your shopping window also depends on which version of FICO the lender is using.  Most  mortgage lenders are using  TU04  and Beacon 5.0  (EQ).  They are said to give you 45 days to shop.

Im sure others will chime in and correct me if Im wrong. 

Good Luck!

[Anonymous]

1. I dont know too much about tradelines, but there are some posts on here somewhere where Ive seen Shane list some.

2.  They'll only look at the 3 months of statements you provide them so old OD shouldnt be a problem.

3.  I know with a FHA loan you can have the DP gifted.  Not sure about other loans.

4.  Ive read the timelines vary as well so Id try to get my quotes within a 14 day span personally  to cover my ass.  I will tell you though that I had a hard pull in June, July, and Sept (USDA twice & car loan) and my scores didnt take huge hits like I expected.

Try not to worry too much.  Its not as scary as you think.  If one bank doesnt like something try a different lender.  I know the lender Im working with has been pretty lenient.

[IOBA]

Have you thought about adding your name to the savings account where the money is?

Changing the amount of money going into TSP?   We just changed ours back to 5%.  Takes 2-3 pay cycles before the change is seen.   That might help you have more funds to put down on a place.

Ask your lender what else he would accept as a 3rd tradeline.   How close are you to having the secured cards at one year?   Will your lender accept being an authorized user as a tradeline?  If so, that might work if you have  someone who will add you as an authorized user.

[Walt_K]

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@Anonymous wrote:

1. I dont know too much about tradelines, but there are some posts on here somewhere where Ive seen Shane list some.

2.  They'll only look at the 3 months of statements you provide them so old OD shouldnt be a problem.

3.  I know with a FHA loan you can have the DP gifted.  Not sure about other loans.

4.  Ive read the timelines vary as well so Id try to get my quotes within a 14 day span personally  to cover my ass.  I will tell you though that I had a hard pull in June, July, and Sept (USDA twice & car loan) and my scores didnt take huge hits like I expected.

Try not to worry too much.  Its not as scary as you think.  If one bank doesnt like something try a different lender.  I know the lender Im working with has been pretty lenient.

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There was a thread about this recently.  Some bank statements list the OD fees for the year, so it is possible that they would see ODs even if they occurred more than three months ago.  If your scores are borderline, that might be an issue.

ETA: Here's the thread I was referncing. http://ficoforums.myfico.com/t5/Mortgage-Loans/What-exactly-are-FHA-lenders-looking-for-in-your-3-bank/m-p/1050602/highlight/true#M81922

[ShanetheMortgageMan]

1.  If your lender will not accept utilities, cell phone, etc. then they probably will not accept rent as the 3rd trade line either, as they are all called non-traditional credit, but you should ask what they will accept.  They should have a list of what is an acceptable trade line and which is not.  Like IOBA recommended, you may be able to get added as an authorized user to your fiancee's credit card.

2.  The bank statement question has been accurately answered IMO.

3.  You can get it as a gift from your fiancee or you can be added to the bank account since it is your funds you've been saving up too.  If you can actually take money out of your TSP then it can be used as down payment funds or reserves, we've used them plenty of times so as long as there are still funds available to access then it should be OK.  Perhaps it was this specific lenders guideline they couldn't use it, but that is odd since it's similar to other retirement accounts.

4.  There is some detailed info in the credit education section about credit inquiries, 30 to 45 days is the commonly accepted time period for inquiries of the same type of credit (mortgage credit inquiry & another mortgage credit inquiry) to only impact your score once - http://www.myfico.com/crediteducation/creditinquiries.aspx although I'd stick with the 30 day window to be safe.

[RW771]

Thank you all very much for your responses!

The 2 share secured cards I have are 8 months and 5 months old. I don't know if my LO would maybe consider using the one that's 8 months or not since it isn't quite a year yet. I need to double check with her and see what else they would consider, but I just remember her continuously mentioning how limited my credit is and how tough it will be for me

I also unfortunately don't have anyone that can add me as an AU either. My fiancee is in the same boat I am as far as credit goes, and the only reason we are not qualifying together is due to the fact that in his divorce back in 07 his ex wife was supposed to refinance the house under herself and never did, and to make a long story short there's just no way we could include him (although the additional income would be nice to have).

I wasn't quite sure why she told me I couldn't use some of my TSP funds either. I was only going to use roughly 2-3K just to assist with what we've already saved for the down payment, but she kept insisting they won't allow me to use "borrowed funds". I found it odd as well, considering everyone I work with used theirs for their down payment, so I think it must be this particular bank? This is part of the reason I was asking if shopping around for lenders would really affect my credit because the more I think about it, the more I'm not sure that I want to use this bank.

I'll keep my fingers crossed that something will work out. I really don't have much going for me with my credit, so I'm trying to contemplate just what all my options are. Thanks again, you all sure help ease my mind!

[IOBA]

If you borrow the funds from your TSP or anywhere else, you have to pay it back.

It may be that the additional repayment puts your DTI ratio too high.

[RW771]

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@IOBA wrote:

If you borrow the funds from your TSP or anywhere else, you have to pay it back.

It may be that the additional repayment puts your DTI ratio too high.

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I changed mine back to 5% as well, so that I could save more. I was only going to borrow 2-3K, paying it back within about 2 years even though I know I have 5 years to pay it back. It doesn't put my DTI ratio too high, especially since I hardly have any debt. I called the bank this morning because I was going to speak to the LO I talked to back in June regarding some of these questions and was told she relocated to San Antonio. I explained what I was told back in June and it seems most of what she had told me was incorrect. He's going to call me back this afternoon where we can talk a little more, so I feel a little better about it already.

[ShanetheMortgageMan]

"Borrowed funds" can't be used, but "secured borrowed funds" can, and that is what a TSP loan is, borrowed funds secured by your TSP loan.  If the loan officer doesn't understand then it could be a sign they are a bit new to lending, so you should certainly ask for a senior loan officer to oversee everything.  Further, secured borrowed funds payments are not included in the DTI since the loan can just be terminated at any time/turned into a withdrawal.