Chances on mortgage....any help appreciated!!!

[Anonymous]

Here is the scenerio:

Husband and I make about 120,000 a year, together.  Our credit scores are 560-600 range, but will be updating soon with paid credit card accounts.  I have 6 tradelines all with good history.  What is hurting my score is past credit issues and a student loan default, which will be rehabed after this month (making last payment in Nov.).  We have 2 credit card lates (30 days) in last two years.  No collections.  Everything else paid on time (credit cards, auto loans, installment loans).  All of husbands trade lines reporting good in last 12 months.  We are looking for a home in the 200,000 area, with about 10-15,000 to put down.  Our mortgage history is perfect. 

Thoughts??  I wasnt sure we could go FHA because of my student loan, even though will be rehabed, have heard it takes a while for credit bureau to update.  I can provide the rehab letter to any potential lender stating it is almost completed.

[DallasLoanGuy]

The student loans will not be a problem. 

How long ago was the last credit card late?

[ShanetheMortgageMan]

Even though you can move forward with just a letter about the completed rehab, you probably want to wait until it reports accurately on the credit report, as it'll remove all of the late payments in the past and boost up your credit score, helping you qualify more easily and at lower interest rates too.

[Ryan2151]

I'm pretty confident you are eligible for FHA IF this is your first home purchase. Keep in mind that FHA requires at the very least 3% of purchase price downpayment and that this will be changing to 3.5% come January, 2009.

That said, my recommendation would be to work towards repairing your scores a bit before shopping for any type of financing. One of the biggest factors in score improvement is going to be time. Time to establish that you are taking care of your responsibilities = higher scores. During this time, you can also save towards your initial downpayment, the larger that is the better off you will be. If that is not an issue for you, the mortgage would certainly help to advance your financial situation and you could always try to refi in a couple of years.

[Anonymous]

Thanks for all of your replies!

This isnt my husbands first home, but will be mine as a homeowner.  He had the condo when we married.  So Im not sure if we could qualify for any of the first time homebuyer programs.

The last credit card late was December 07.  It was 30 days.  I have sent a goodwill letter, awaiting to hear.  My husbands mortgage history is perfect, never late. 

We should have about 10,000 to put down, maybe a little more.  Purchase price is 219,000.

[ShanetheMortgageMan]

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@Ryan2151 wrote:

I'm pretty confident you are eligible for FHA IF this is your first home purchase

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FHA is not just for first time homebuyers.

[ShanetheMortgageMan]

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@Anonymous wrote:

Thanks for all of your replies!

This isnt my husbands first home, but will be mine as a homeowner.  He had the condo when we married.  So Im not sure if we could qualify for any of the first time homebuyer programs.

The last credit card late was December 07.  It was 30 days.  I have sent a goodwill letter, awaiting to hear.  My husbands mortgage history is perfect, never late. 

We should have about 10,000 to put down, maybe a little more.  Purchase price is 219,000.

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What are the plans with the condo?  Will it be sold before, or at the same time, the new home is purchased?  If not, it's payment will have to be included in the debt to income ratio.  If you rent it out then the rental income can be used to help offset the condo payment, but only if you have the required amount of equity (or are being relocated).

With your scores now, FHA will require 12 months of clean credit, so until you are into December you wouldn't be eligible.  However once you have finished the rehab of the student loan all of those past late payments will report on time, your credit scores will increase probably to the point where one 30 day late payment in the past 12 months will be OK for FHA.

[Anonymous]

The builder of the home we want to buy is willing to buy it.  He will probably resell it, or use it as rental property.  He has offered us a great price on it.  The home we are interested in was built by a couple, but  their loan fell through at the end. 

[ShanetheMortgageMan]

I'm confirming with an underwriter but that situation, where the builder is buying your home, should be OK.  I had another situation where a buyer & seller were buying each others homes and that went fine for FHA, so I don't see why being a builder would cause any problems.

How long ago was the home you are interested in completed?

[Anonymous]

Thanks for your reply!

The home was completed about 6 months ago.  I just got my letter today regarding my student loan rehab