Beginning the process, credit repair then loan approval and hopefully closing on a home

[BeBop]

Were beginning the process of the home hunt. So any advice at all would be very helpful. (I've found these forums REALLY helpful)
We're a same sex couple who are TIRED of renting and ready to purchase our first home. Here's some back ground information. We've been living together for about 5yrs now (both our names on the lease)

I'm a recent college graduate with poor credit (I thought it was ok until reading these forums lol)
-CreditKarma now have me at 648 with 2 derogatory marks and 1 charge off.
-I did a PFD on both derogatory marks & received company letterheads for both. 1 just post this year 1/2013, the other is from 3/2008
-I'm currently salaried making 43K a yr base salary, DOES NOT include overtime, bonus & holiday pay. I've been at the job about 2yrs (average ~50K in 2012)
-13k in student loans, all in great standing (320 payment)
-9k in auto, in great standings as well (237 payment)
That's literally my only "debt to income" bills

He is older and have really really horrible credit. He has a recent repossession( his father passed and he didn't want to pay on 2 cars) on his account and other small "normal" mistakes
-his salary is roughly 55K a yr, he's been on his job for about 5yrs now
-he just paid off his car
-no longer pays child support (child is finally 18)

Were both in our states credit union. We just spoke with a correspondent with the first time home owners program. They pretty much told us that He(older) is the harder case to work so our best bet is to repair my(younger) credit and pay off these debts first and that his name shouldn't go in the loan at all. Clearly as I stated above I've already knocked off 2 things only thing left is the Capital 1 charge off, which were working on paying full at the beginning of Sept.

-our combined salary is ~80k to ~85K together BUT my question is, if I(younger) apply then are they going to base everything solely on my ~43K salary?
The online calculators say I (using my salary only) can afford about ~125k home....this is about 25k lower than the starting townhomes in our area. (150k+)
I know we haven't gotten approved for anything but im just a little nervous because we're renting within reasonable range of our jobs and as I stated the homes in this area starting prices are ~150k. We did a quick search for ~125K homes and most of them were WAY out of range of our commute to work.

QUESTION: what is the likeness that I'd get approved for 150k?
-the program does 100% financing but it has this 3.5% stipulation also, that's only 5,250....we have that
-Is there anyway the loan owners will acknowledge ANY of my life partner salary
-anybody else use a credit union for the home mortgage?
-any advice?

[frugalQ]

In order to use his income, they will have to use his scores.

Is it possible to 'sell' your car to him? That way the car note will no longer be in your name and won't count towards your DTI. I know you said he had a repossession, but it sounds like maybe there were extenuating circumstances. Maybe he can get a loan through the credit union.

Also, you may have to use alternate forms of credit since you only have a couple of trade lines reporting on your credit report....like utility bills.

Good luck.

[StartingOver10]

BeBop, Welcome to the Mortgage forum!

IMO, you and your partner would be better off repairing both of your credit files. You are well on your way and, not knowing what is on your partner's file, it is not impossible to repair his file. Go to the credit repair forum here with your partner. You might be surprised at how much you can get done rather quickly. The recent repo on your partners file is an issue. How recent is it? Can he contact the creditor and make a settlement? I am thinking something along the lines of a PFD (pay for delete).

In order to use your partner's income, both of your have to be on the mortgage and both of your credit scores are used. As pointed out before, the lower of the mid scores will be used.

Normally I recommend going to a CU for most credit related persuits. However, with a mortgage, you are probably better off going to a mortgage banker that funds their own loans and then sells them to one of the big mortgage companies after you close. They generally have a larger selection for your mortgage type and can handle exceptions a little more easily. I don't want to mislead you at all, the recent repo is definately an issue. It will need to be handled prior to your obtaining a mortgage if your partner is going to be on the loan.

If your partner's credit is such that he can't get on the loan, even after repair, then consider doing the loan yourself. In order to increase the amount you can borrow, you need to get rid of one of your long term loans. Probably the car as the balance is lower. Can you either sell the car or pay the loan off? Right now you have $537 in monthly debt and part of that is imipacting how much you can buy given your present income.

[BeBop]

Yes,I'll definitely consider looking into a mortgage broker. It's just that scare factor of "MUST HAVE score of 640 or higher,"
I used a pay for deletion on two of the derogatory marks. WITH them still on my TU report my score is at 648

Should I just google "mortgage brokers + "my state & county"?
Do you have any recommended brokers?

I'm thinking it can only go up once those are removed, right?
1 is recent as in Jan 2013
1 is from 2008

Both was less than $400 in collections

-Can anybody help me with gauging how much of raise I'll most likely get?

The Capital 1 charge off is at about 1300 for a credit card with spending limit 1000
We've planned to have that paid off come Sept 13
We DON'T want them to put "settled" on my report, were hoping for a "paid in full" or "paid"
BUT was thinking maybe asking them to knock off a few months interest rate...at least down to 1100 or 1050

]-any helpful tips on dealing with charge offs & capita 1 (credit card companies)?
-I'm NOT dealing with the CA (Northland group -I've read HORRIBLE GOD AWFUL things of this collection agency), should I contact Capital 1 directly?

[BeBop]

Re: Beginning the process, credit repair then loan approval and hopefully closing on a home [ Edited ]
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‎08-17-2013 12:03 PM - edited ‎08-17-2013 12:06 PM

Yes,I'll definitely consider looking into a mortgage broker. It's just that scare factor of "MUST HAVE score of 640 or higher,"
I used a pay for deletion on two of the derogatory marks. WITH them still on my TU report my score is at 648

Should I just google "mortgage brokers + "my state & county"?
Do you have any recommended brokers?

I'm thinking it can only go up once those are removed, right?
1 is recent as in Jan 2013
1 is from 2008

Both was less than $400 in collections

-Can anybody help me with gauging how much of raise I'll most likely get?

The Capital 1 charge off is at about 1300 for a credit card with spending limit 1000
We've planned to have that paid off come Sept 13
We DON'T want them to put "settled" on my report, were hoping for a "paid in full" or "paid"
BUT was thinking maybe asking them to knock off a few months interest rate...at least down to 1100 or 1050

]-any helpful tips on dealing with charge offs & capita 1 (credit card companies)?
-I'm NOT dealing with the CA (Northland group -I've read HORRIBLE GOD AWFUL things of this collection agency), should I contact Capital 1 directly?