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Established Member
Posts: 36
Registered: ‎03-22-2009
0

Can I Qualify?

I've been rebuilding my credit over the last year and am in the waning hours. I have been working towards getting my family into a home of our own, and would like to be moving in by the end of May, when my son is out for summer break. I've learned quite a bit about rebuilding credit but am a total novice on mortgages. My big concern, outside of getting accepted for pre-approval, is not having enough cash in hand to cover both the downpayment and closing costs. I have been talking to with a LO at REMN (Real Estate Mortgage Network) and have given them the ok to pull my report and start seeing where I'm at. I'm hoping that either my student loan rehab reports to the bureaus or that a lender can help me expedite the process. I would also like to see if my local bank (been with for 10 years) or CU (been with for 3 years) could get me approved, but am afraid to talk to anyone at either place until I know my loan rehab updates. So my question is really two-fold: What are my chances to qualify given the following information and do I have too little saved to covered 3.5% down and closing costs?

Info:

  1. Credit.  TU 662 EX 640 EQ 600

Just finished student loan rehab March 28th, waiting for credit report to update. This will remove several lates and default status, anticipate a 40-80 point increase. Don’t know how to expedite the bureaus reporting this.

3 medical collections with balances, out of SOL, I have the money to pay. Amounts 270, 140, 80.

4 medical collections paid.

No other collections.

HSBC C/O from 04/2007, paid the CA.

Lates on student loans from 08/2010, 120days.

Paid/Satisfied judgement only reporting on TU, 12/2010

4 revolving accounts, no lates, authorized user (my wife’s credit cards) 1 year history, 0% utilization reported.

  1. Income 60,000
  2. Source of Income  Full-time employment, 5 years on the job, 10 years in the industry
  1. Monthly debt payments.  405 auto loan payment, 130 student loan payments
  2. Employment Full-time employment, 5 years on the job, 10 years in the industry
  3. Assets/Reserves.  5500 savings, 6000 available from 401k
  4. Location.  Arkansas, Craighead County
  5. Property.  Single Family Home
  6. Value.  158,000
  7. Occupancy.  Primary residence
  8. Transaction Type.  First time home buyer
Established Member
Posts: 36
Registered: ‎03-22-2009
0

Re: Can I Qualify?

Not a big fan of bumping my own post, but would anyone care to provide some input?

Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
0

Re: Can I Qualify?

I think you are in pretty good shape once your middle score goes up a bit. Purchase price is reasonable for your DTI.

The medical collections and the one CO might pose a concern. If you can PFD the unpaids and GW the paids that would boost your score even more. Don't pay without deletion...it will hurt your score when the collection is updated as paid.

If you don't PFD or GW, it is likely the underwriter will want them all paid off. If so, ask to pay at closing so the score ding occurs after the final credit check for clear to close. If it was just one collection or one late and your score was low 700's, the UW would most likely let one slide. But with multiple derogs, be prepared to pay them.

Since you want to move in May you need to get a jump on it as it takes 30-45 days to close. Worst case, they tell you to wait 6-12 months or until the collections, etc. are paid. I had to wait a couple of times before getting approved. So don't get discouraged if you are asked to wait.

Check with your housing authority for special loan programs and look into new construction inventory homes that are move in ready as many builders will pay your closing costs for you. Our $8000 in closing costs were paid by the builder. And I found a great program through our housing authority that rolled the 3.5% down required by FHA into a second mortgage. So we essentially got a $347,900 home for zero down. We paid $2000 in earnest money. We paid for our inspection and that was it. We moved in 2/7/13 and our home already has $20K in equity because home values soared in the subdivision where Lennar is building out here. Demand is higher than supply and because of that, home prices are going up so 100% financing isn't too bad right now.

Good luck and I hope this info helps you.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Established Member
Posts: 36
Registered: ‎03-22-2009
0

Re: Can I Qualify?

Thanks for the reply, very helpful indeed. I'm hoping the student loan rehab update will bump my score up a bit. 

I tried PFDing the CAs for the medicals but they won't budge. I've had good luck PFDing the OCs on these so I may try that. As far as the paid collections and the CO, GWs haven't worked so far. Luckily the CO falls off next year. Prime Lending is going to go ahead and pull my score tomorrow morning. IF the rehab isn't reflected I'll see if rapid rescore is an option.

 

As far as the assistance programs, that's a good idea, I'll look into them. I wasn't sure if I'd qualify, Arkansas is a lower income state so I'm sure the bars are lower than others. projecting my income is tricky too, if I went solely on my wages it would be 52k, but by going by what I've actually grossed so far this year its 73k. I work alot of overtime.

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