Mortgage Loans

[rangergirl]

I am so scared to apply for an FHA mortgage.   I don't have any collections or public records on my credit reports, and my DTI is about 12 - 17% (not much debt at all).  My car will be paid off in 6 months. I have 5 late payments on my car payments over the last 4 years, but none in the last 16 months.  I have the 3.5% down and enough for the closing in savings, but I'm just afraid the former late payments will prevent my approval.  All other payments (Credit Cards and installment loans) have been paid completely on time.  My scores are 655 EQ and 688 TransU.  I assume Experian will be somewhere in between.  I make around 70K per year and have been employed for 10 years at the same company.  Any insight at all?  My current rental is about to sell so I will be needing to move in about 2 -3 months.  Any insight would be greatly appreciated.

[Familywantsahouse]

You should be fine! *maybe* they'd need a LOE for the late payments, but based on what my broker has told us, you'll be fine. Assuming all your rent payments are on time?

[rangergirl]

Yes, they are. My rent payment was really low for 8 of the last twelve months ($200) due to roommates, but it has increased back to $875 the last 4 months and I have no late payments on any. Prior to that it was $875 and I was not late.  I realize payment shock might be an issue as well, but I do have money saved for the down payment, etc.  I also have a 401K. Not huge, but decent.

Thanks for the reply. I feel better about it.

[boomhower]

Your fine.  No  lates in the last 16 months and nothing later than 30 days, you are perfectly OK.  Cash for DP and closing, good to go.  FHA requires no reserves but your 401K is still a good bonus.  I went from $0 rent to a payment and they never said a word about payment shock, and no I wasn't putting in enough to savings to equal the payment.  I think payment shock is a lender specific or program specific deal and FHA doesn't look at it.  App and find a home, your good to go.

[webhopper]

You are in a good position to buy a home right now good job on the work this must have taken you!

[FICOisa4letterword]

Rangergirl - like you, I was terrified to apply. I was literally sick to my stomach and losing sleep at nights dreaming about rejection. I finally went for it this morning, with myFICO scores almost exactly like yours. Within 2 hours, I was pre-approved! My actual scores from the lender came back EQ: 658, TU: 710, EX: 710. On here, my EQ was 658 nd my TU was 694. I also have 2 medical collections totaling $495 and one 5 1/2 y.o. CO for $2,700 for a CC. I say go for it. Knowing one way or the other is better than living in emotional purgatory.

[pilarstacy]

Congrats!!!!   I know it was a huge relief.   Makes me feel more at ease as well.    Best of luck!!!!

[firsttimemama]

Sounds like you've already gotten lots of encouragement from this board! Good luck and let us know how it goes!