Do I qualify for a mortgage?

[MonsterMad28]

I am going to be posting in the credit card forum on how I can clean up somethings on my credit but I just put this out here because I would like to buy a house as soon as I can.

1. Credit. 

Credit Score: 599/600 

Charge offs: First Premier Bank: 2 cards $450 each both paid in full.

                     FRDF/CBNA: $650 Paid in full

                     Credit One: $400 Paid in full

Medical Bills : West Asset Management: $150 (Paid hospital when it was in collections trying to figure how to get it off report.)

Income.  $65,000

Source of income.  Airline, Hourly

Monthly debt payments.  Car note $550 Personal Loan $200 Student loan $5,000-$70/mo

Employment Airline - 8 years

Assets/Reserves.  Savings $1000, checking $1000, 401k $90,000 (Can pull $30,000 for a down payment from this)

Location.  Colorado, Denver

Property single family house or condo or townhome

Value.  $230,000

Occupancy.  Primary residence

Transaction Type. First time home buyer

[StartingOver10]

Where did you pull your scores from? Here or somewhere else? What is the third score?

If the scores aren't FICO, then pull your FICO scores from here so we know where you stand. If you got your scores directly from Experian, TU or EQ those are not FICO scores.

Do you have any cc acounts that are open? If so what are the cr limits and the balances now?

The personal loan note, how much is the balance and how many months do you have remaining?

Same info with the auto loan - balance and term remaining.

[MonsterMad28]

Other is 600. All pulled from here.

Two CC's $900/600 & $650/450 The $900 is a secure card. Both are Capital One and the $650 just got a $200 credit increase for paying on time for 6 months.

Auto Loan $11,000/3 years left  Personal loan $5,600/3 years left

Also those charge off CC's have been paid off for about a year & half. But can't get them off my report so they just sit....

And I forgot I have a Student loan which is $5,000/$70mo

That's everything.

[StartingOver10]

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@MonsterMad28 wrote:

Other is 600. All pulled from here.

Two CC's $900/600 & $650/450 The $900 is a secure card. Both are Capital One and the $650 just got a $200 credit increase for paying on time for 6 months.

Auto Loan $11,000/3 years left  Personal loan $5,600/3 years left

Also those charge off CC's have been paid off for about a year & half. But can't get them off my report so they just sit....

And I forgot I have a Student loan which is $5,000/$70mo

That's everything.

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This is good news that you have open and active cards.   Your utilization is quite high on these cards and since you have two cards both with high utilization it is hurting your scores temendously.

To optimize your score, one of these cards needs to be at a zero balance and the other one at a balance of less than 9% of the credit limit. So for example, the $900 credit limit card would have a balance that reports of $81 or less (maximum) and the other card would report a zero balance. If you do this then your score will most likely get into a range where you can qualify for an FHA mortgage.  Possibly even a conventional mortgage.

The issue I see with you though is your DTI and the price of the house you want to purchase. What would be the real estate taxes and insurance for a house in that price range?

[MonsterMad28]

The 230,000 was just what I could afford. I would probably be looking in the $100,000 - $150,000 (condo/town house) range.

I also took off about 3 months last year because we had a child. I will probably make $80,000 - $90,000 this year. I just used what was reported on my W2.

Property taxes for the area we want to live in look to be in the $1,5000 - $3,500 range. Home insurance I don't know. I did some poking around on the internet and it can be anywhere from $500 - $3,000 a year.

[StartingOver10]

What will be used for your housing ratio is the total of principal, interest, real estate taxes (1/12th), homeowners insurance (1/12th), mortgage insurance (if applicable) and HOA or condo fee.  In addition to that your back end ratio will include your payments on your personal loan, car payment, cc debt and school loans.

Hopefully the score will get up to over 620 so you can get a mortgage. There are mortgages with lower scores but then you will have to put down a larger down payment, and the mortgage insurance rate when applicable is much higher.