American dream...Homeownership...advice and suggestions welcome....

[REALISTICLYSPEAKING2014]

My story....

Credit.TU - 636 EX 598   EQ 602
Income.  $65,000
Source of income. Employed
Monthly debt payments.

Auto Loan $540.00 -

IRS - 200.00 monthly

NFCU Visa - 1@ $3,000.00 (bal $1885.00)

NFCU secured card -CL 500 (bal $175.00)

Capital one Secured MC CL361 (bal $80.00)

Capital one unsecured MC CL 300 (bal 40.00)

Fingerhut - CL  600.00 (bal 100.00)

Dress barn - CL 300 (bal 85.00)

Employment. Full Time/ 8 years same company

Assets/Reserves. 401K $12,000 (if needed) , Savings $5,000

Location.  Hollywood, Fl (Broward county area)

Value.  Looking at around $180,000-200,000 (Prequal with NFCU for 230,000 with 0% down 100% fiancing (just for curiousity sake)

Occupancy.  Primary residence

Transaction Type. Single family or Duplex

Been in credit repair mode for 3 years now; Only 2 collections showing, one to fall off in November 2014 and the other just PIF last week. Its showing about 1 year old now in amount of 1,885.00) . Trying to GW for removal. But it is paid and closed. Everything else is positive altho length of credit is somewhat short (7 years).

I have set up a strict budget with all cards being paid down to 10% util within the next month with the exception of the largest which I got to pay the collection off last week. I have budgeted 500 per month to pay that off in 3 months and then will focus on the IRS debt owed. Pymt arrangement for 200 per month - bal $6,000.00.

I see myfico scores increase almost weekly so I am in the right direction - My only dream and goal right now is to purchase my own home...Right now living with friends and I do contribute when needed, but pay for incidentals like food, toiletries, etc. Utility bill here and there...

Thoughts? Suggestions? Ideas? Short term and long term goals to make this reality!!! I can taste it and its killing me...

[ShanetheMortgageMan]

Thought NFCU required a 680 score for the 100% financing program, it's their toughest program to get approved for so I've been told.

I suspect your scores would get a nice bump if you pay down the $1,885 balance one.

$200k should be possible, just need to get 12 months of clean credit and probably best to get your scores up to at least a 620 or 640 so you'd have a better chance of getting approved via automated underwriting.

[REALISTICLYSPEAKING2014]

Thanks so much  for the feedback!

I didnt get preapproved with NFCU as I didnt want a HP and I knew I wouldnt get approved yet, just prequalified based on income and DTI. I was wondering how much of a mortgage I could afford and I dont want to be house poor and get in over my head making a stupid decision. Now I will begin gardening, no more credit apps, and hopefully things in my fico will show rapid improvement.

NFCU has been AWAZING with helpingme. New car loan was extrememly simple even with the late and the collection and the Platinum Visa for 3,000, but I had to ask for a credit increase since I had only been initially approved for 500, and I figured I could payoff the CO and gain a positive tradeline at the same time.

I do have a couple questions- When I purchased the new car in March, I had traded in my previous vehicle and the old loan was paid off by the dealer. I have a 30 day late  on there (Chase) and now that they are no longer reporting, will that late status remain? The car was paid off in March and that was the last reporting, but the late was from Jan 2013 and I dont really see it moving anymore on MYFICO calandar history.

If I cant get the 1885.00 collection company to GW, since it has been paid in full will it just being paid be sufficient for the LO? They wouldnt budge when I requested a pfd, but at least if its showing, its showing closed and paid in full. (which is better than not being paid right?)

Also, Ive been doing some research on first time home buying program thru FHA. Should I go that route or try to keep with traditional financing? Where can I find a company that can give me the guidance to help me? I think I need to locate someone in florida correct?

I appreciate your help...

[ShanetheMortgageMan]

Unless a goodwill letter works, then yes the 30-day late payment on the old car loan you paid off will remain on credit.  The late payment is hurting your scores, but it's old enough for a lender not to be too concerned.

Paying off collections is a tough decision, because yes it does look better to an underwriter but an underwriter may not even require it to be paid off as part of the loan approval. Plus, paying off older collections can sometimes "refresh" them which can damage your score.

FHA isn't just for first time homebuyers.  It's just the program a lot of first time homebuyers use when they don't have a large down payment and/or no better than fair credit.  Down payment assistance is usually just for first time homebuyers though, and has income restrictions where you cannot make more than a certain income figure in order to be eligible.  Availability of the assistance programs vary.  http://apps.floridahousing.org/StandAlone/FHFC_ECM/ContentPage.aspx?PAGE=0045 is one for Florida.  There may also be other local ones in the area you are buying in.  You don't have to use a lender in Florida if you don't want to, but sometimes that helps sellers feel more at ease if the lender is local.  What area in Florida are you going to be buying in?