Approval Questions for FHA Loan

[jwills1218]

My Scores 612, 627, 642

Her Scores 577, 587, 587

A lender in Arizona will do it with a 580 middle score. It looks like we can just squeeze by with my wife's score since they take the lowest of the two scores.

The Issue:

Lates on Cap 1 Credit card from when our auto payment did not process.

Feb 2014 30 day

March 2014 30 day

April 60 day

May 60 day

June Current

Otherwise, on both of our profiles we don't have any lates since 2007.

Job History.

She was with an empoyer for 7 years and changed jobs last year and has reached her 1 year annivarsary. (same field, retail manager)

I have been with my current employer since Feburary, I was with my employer before that 5/2013 to 2/2014. I had a 2 month gap of unemployment when my previous job laid off its entire retail field. All positions and changes are for upward movement and increase in Salary. (42k, 52k, and then 62k currently)

With these details do you think we'd have a problem getting approved?

[Anonymous]

I am not an expert but with her scores so low you will probably get a high interest rate. Also with all those current 60 day lates and 30 days late, that may be an issue. Best thing to do it talk to a lender and see what they say. I do think the lates are what will hurt you the most.

[StartingOver10]

I think the multiple 30 and 60 day late payments this year will prevent you from getting a mortgage until you can show 12 months with no lates. If you only had one 30 day late, you might be able to overcome it. However, you are showing lates for 4 consecutive months.

[ShanetheMortgageMan]

+1 on the others consensus.  Unless you get a very forgiving underwriter I don't see this happening until next May or June.  The auto payment failure reason could work for 1 late payment, but 4 consecutive late payments the underwriter is going to want to know how you didn't notice, and would start to doubt the reason for it going late.  It also looks a little weird that the earlier months are less late than the older months, i.e. if the payments weren't posting at all then wouldn't Feb be 120 days late, March would be 90 days late, April 60 days and May 30 days?  Guess it's better to only have 2x30 & 2x60, but again it's going to be very tough to get approved right now.  I'd look into writing a goodwill letter and see where that gets you.

[jwills1218]

I'm working on the goodwill, an online chat person set up a dispute to remove the lates. I was told by another rep that the lates would be removed. When checking on the status today they said it may happen. I have the chats saved saying they will delete it from the 3 CB's.

Hopefully I sort that out quickly. It sucks it happened but the time is now to sell and buy for our family.

Thanks for the opinions, all.

[ap84]

I think you will be ok. They may just ask you for a letter of explanation on the late payments and the employment gap. Your scores will qualify you.

[jwills1218]

I hope so! It was such a dumb mistake. We also plan to use some of the profit to pay off a large amount of our CC debt. That should help raise the scores as well.

I'm hoping cap1 actually removes the lates as they said they would.

[StartingOver10]

---

@ap84 wrote:

I think you will be ok. They may just ask you for a letter of explanation on the late payments and the employment gap. Your scores will qualify you.

---

No. Getting a mortgage is different than getting a car loan or another credit card. It is not just your scores (anymore). Scores are one component only. Multiple recent late payments matter. Once they are over a year old though, then they are less important and can be explained.

[ap84]

We can agree to disagree. I closed on my first home with multiple collections and a few credit card lates. I am in the process of buying a new home and I have a few car lates this year, I was told it wouldn't be an issue they will just ask for a letter of explanation. The people that I am working with have over 20 years experience one being a former underwriter. In think he/she will be fine.

[TimeToRecover]

AP84

when did you close on yourfirst house that you say your lates didn't matter.  If that was prior to 2008ish lending practices and getting home loans were much much different.  Today the rules and requirements are much tighter.  

My personal opinion is that the recent lates if still on the credit report will be an issue.  To the OP I do wish you luck and hope that Cap1 will remove them for you.  With them removed you will  1 not be a big red flag to underwritters and 2 your score should go up significantly.  Recent lates are devastating to a credit score.