Approval obstacles

[Anonymous]

I live in the South Florida area and I've been working on my credit for about three years, Over the past three year i managed to pay down most of my revolving credit but i still have a significant amount of  student loan debt, with no late payments.  My concern is this, I received pre-approval for FHA loan up to $350,000.00 and saw a nice, brand new shiny house which is significantly more than the FHA loan limits.  The builder also requests a 20% deposit and thats not doable at this time.   I want this new shiny home, what should i do, to increase my scores to qualify for a conventional loan.  My scores are stagnant.

four baddies

charge off for $609.00 - tire plus due to fall off next year, negotiated settlement offer is a joke

Two 30 days late on auto loan - declined request to delete lates

Two 30 days late with capital one two 60 days late with capital - unsuccessful with GW letter request to remove lates

Settled repo from Capital One Auto

mortgage score as of June 15, 2016

equifax 669 transunion 667 and experian 679

Auto loan balance

$1,670.00 - roughly 10 payments to go

credit card debt

$4,000.00

Income

$124,000.00 between two jobs, $20,000.00 in savings, I take home almost $7,000 after taxes and deductions.

[Anonymous]

Sorry OP, but it sounds like this shiny house is out of your price range based on your post. Your scores are low for conventional and the mortgage insurance would be very high. It sounds like you don't have the 20% to put down to avoid it.

Talk with your lender and find out why s/he is approving FHA versus conventional. Could be your DTI ratios and could be their overlays won't qualify you.

How old is the repo and the lates? Might be nothing you can do except let them age.

[Anonymous]

How old are these lates on your reports? Also, how many credit cards do you have and what are their limits?  The reason why I asked for example is if you have one card with a limit of $5,000 but have a $4,000 balance, that isn't good.

Provide as much info. as you can if it is not too intrusive for better responses.

[Anonymous]

The reposession is originally from 2012,  but because i settled in 2016, because i settled with capital One I expect it to report for an additional 7 years

I have about 17 credit cards (store cards and major cards)  only two cards have a balance

Macys - $419 credit limit $2,400.00

Visa balance - $3,950.00 - credit limit $7,000.00 - zero interest for 6 months will be paid off in 3 months

my lowest credit limit is a wells fargo $600.00 which have scheduled bill payment for my cable, ADT, and cell phone (this affects my utilizaton monthly) but i will change it to my master card with a $3,000.00 credit limit, which i havent used in a while

Barclays - $5950.00 credit limit zero balance

Ann Taylor - $1,250.00 credit limit zero balance

Capital one - $2,500.00 credit limit zero balance - 30 days late august 2013 - 60 day late september 2013 and dedemer 2010

Capital one - 2,950.00 credit limit zero balance

tire plus - charge off $609.00 - date of last activity july 2010 - settlement offer is for a 40% discount with the expected damage i would like a deeper dscount.

Student loans - $52,000.00 currently make two payments per month with the expectation to also sink my income tax returns annually to pay this down.

according to my loan officer i'm well qualified for a FHA my dti is 18% I experienced bad credit for a number of years and i give plenty respect to credit usage.

[Anonymous]

The lates are from december 2010 - 60 day late, september 2010 - 60 day late, august 2013 - 30 day late.  i have about 17 credit cards

Credit union visa $7,000.00 utilized $3950

Capital one visa $2,950 utilized $0.00

Capital one Mastercard $2,500 utilized $0.00

Wells fargo Visa $3,000.00 limit utilized $0.00

Wells fargo Master $600. fluctuating utility of aroung $240.00 monthly, 3 bills scheduled for auto pay on this card paid in full monthly

Barclaycard $5,950.00 utilized. $0.00

Ann taylor $1,250.00 utilty $0.00

Macys $2,400 utility $419

Wallmart $3,200 utility $0.00

Banana republic $3,300 utility $0.00

Express $1,700 $0.00 utility $0.00

Rent $1,300

Student loan $52,000.00 monthly payment $375

car loan $275 balance of $1,700.00 never paid late

[Anonymous]

Did Cap1 update your reports after you settled that repo? If so, that fresh 2016 date can really hurt your scores.

Can you get a PFD for the tire plus? I wouldn't settle unless they will do that. If they update to the bureaus, it can further push your scores down with another fresh 2016 date. I would find out from your LO if it's required to close (FHA does not but it could be a lender overlay).

Can you get the visa under even 30% or 20% utilization? It's over 50% and that hurts.

[Anonymous]

Oh and another question, you mentioned the house you really want is significantly over the FHA limit - are you talking jumbo numbers ($417K +)? That's a different conversation than just getting approved for a conventional mortgage.

[Anonymous]

Yes capital one updated with all three CRA showing the settled account which dropped my mortgage score from 680 to 660 which went back up a couple of points after the settlement date, go figure.  I only settled with Capital One because of the conditional pre-approval letter that i received that stipulated that i take care of capital one and tire plus.  Since Tire plus is under $1,000.00 I plan on asking that settling with/paying off Tire Plus as a condition of approval is waived. 

I will pay down my visa with the high balance significantly this month.  Tire plus said no for the pay for delete but i will make one more attempt at this.  The thing that gets me is that everytime i pay off an account my score takes a hit. 

the house that i have my eyes on is $452,000 base and a 10% down a representative told me 20% down but the paperwork states 10% i would have love to do 20% to get rid of the PMI.  The new house is beautiful, spacious the community would cover outside care one less thing i would have to do in a community setting.  I make decent money but this is a scary transaction for me.