Hi all. Thanks for any help you may have.
I have a couple of charge offs from January 2010 (due to job loss). One for 5000 and the other for 7000. I spoke to an LO last week who pulled my credit and spoke to an underwriter. My middle score is currently 657. I have a car payment of $330 and a student loan payment of $250 due each month and a credit card with a balance of $1000 of which I am using 50% and make $54000 a year.
The underwriter said she'd probably require a 5% payment be factored into my debt to income ratio for the old charge-offs and that might bring my debt to income ratio above 50%(which is strange since when I calculate it, it's only 43%, but okay maybe they are using a more expensive mortgage payment).
What she was more concerned about was a $100 debt from going to the doctor in January that showed up from January 2014. I guess that's a reminder to check your credit report since I had no idea about it until now. It's only $100 so I certainly would have paid it had I known about it. Turns out they've been sending bills to an old address. I have contacted the agency and they verbally agreed to request it's deletion, but they wouldn't give me a letter in writing to that effect. My LO suggested that it wouldn't be difficult to get me into a conventional mortgage if the medical debt is removed since all my other derogotories are from so long ago.
I planned to contact the credit reporting agencies on Wednesday to ask them to expedite it's removal(it's what the debt collector suggested I do). In any case, I got served with a lawsuit for the $7000 credit card charge off a few hours ago. I suppose that changes things, right? Or does it since the debt is the same no matter what?
I'm planning to request dismissal due to the statute of limitations having expired, but am not sure if that will work since I enrolled in a debt management plan in 2012 and made a few payments with that so they may argue that that reages the debt.
In the end, I am happy to be sued now rather than while in the closing process. I just finished a homebuyers class and they told a story about someone who's credit took a sudden downturn and they couldn't get approved on the day of closing and that's the last thing I want to have happen to me.
If worse comes to worse, my parents have offered to co-borrow, but I REALLY do not want to ask them to do that. I know I should get this squared away before getting a mortgage, but the market is kinda hot here in Dallas and if I want to buy a house in my budget($65,000 to $85,000), I feel like I need to buy this year. Even the county-run homebuyers course instructors said several times in class to try to buy this year if possible because they don't see the market cooling off any time soon.
ETA:
Tried to delete this message. After thinking about this overnight I've decided to let go of the new home dream for now so I can take care of the debt first.
