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I am still new to this Mortgage Loan forum and wanted to see if anyone can give any idea if we can qualify for a mortgage loan or not. if yes the how much? Here are our profile. We are planning to apply for mortgage in around September/October this year.
Wife's Credit : Primary Applicant
FICO: EX :740, EQ: 765, TU: 754
No baddies, Oldest account is from Dec, 2008,
Newest Car loan (Joint) : $40000 from Nov 1, 2013.
Last inquiries for car loan was in November, 2013. (about 6 or so on each bureau on same day, should be counted as 1)
No recent credit card inquiries (last CC inquiry was in early 2012).
Have another car loan (individual) of $17000 from February, 2013.
Yearly Income : $78,000
Utilization: 46% (will bring down to 0 before applying)
My Credit:
FICO EX: 654, EQ: 640, TU: 664
Have 4 paid collections on (1 from 2010 (only exists on Experian), 1 from 2011, 2 from 2007 and scheduled to drop off in Sep & Oct 2014)
Have 1 Capital One charge off (Paid, from Nov 2012)
Have 1 CHASE charge off ( Paid, from 2006 and scheduled to drop off in March 2014)
Have 20 something lates (30,60,90,120) on a paid off car loan. last late happened on this loan was Nov 2011. Paid off in October 2013.
Oldest credit card account is from 2007 (closed)
all other postive credit or store cards were opened in 2013 (Feb - Sep). Opened 15 accounts. Closed 2 this year (no longer using).
Opened 6 new Credit cards this January 2014, of which 3 is from AMEX and are backdated to 2013 March.
Have a join auto loan account of $40000 from November, 2013.
Have tons of inquiries on all 3 reports, but most of them were from last year and by September 2014, 90% of them will hit 1 year mark.
Utilization: 24%
Yearly income : $110000.
What are the payments on the $40k & $17k car loans?
How much of a sales price are you looking at buying? How much of a down payment are you looking to put down?
Payments on $17K loan is $381/month , on $40K loan is $655/month. We are planning to put down $50K down. Looking to buy a house around $300K in Texas.
With those debt payments, your wife's income alone would result in a pretty high debt ratio (ballparking at 49% with conventional financing) on a $300k sales price with $50k down, which is unlikely to get approved (possible, but unlikely). Conventional debt ratio caps out at 49.99%, but anything over 45% needs an exceptionally strong applicant to get approved for (usually 20% down, 740+ scores, prior mortgage history). Adding your income to the equation would easily get your debt ratio to qualify (it'd be in the low 20's), however your scores would result in expensive interest rates. You could theoretically qualify up to $467k sales price with $50k down.
I'd recommend you get your score up to at least a 680, which given your 7 month timeframe just may be able to happen. The past delinquencies are old enough not to have much of an impact (unless the underwriter is extremely conservative). Worst case is you could go with FHA financing, but I think you should have a very good chance of qualifying for conventional.
Thanks for all the suggestions. Yes I am expecting the scores going upto 680 - 700 range for me in next 6-7 months, once 3 of my baddies fall off. My wife's scores will go upto 800 level once she pays down her balances.
@sghosh5 wrote:Thanks for all the suggestions. Yes I am expecting the scores going upto 680 - 700 range for me in next 6-7 months, once 3 of my baddies fall off. My wife's scores will go upto 800 level once she pays down her balances.
sounds like you will be a good candidate for conventional.... you seem to have a good grasp on what you are doing.
stay on track and apply with confidence
Thanks. I have question: all of the new accounts I opened last year will hit one year mark by September 2014. Will an underwriter consider them still as new accounts?
Do you mean will the underwriter hold them against you and use as a reason to decline? No.
Thanks!