Do we have a chance? Should have never gone to that open house.

[hellothere1]

Hi everyone, and posting for the first time. We are starting the process of looking for a home and really need to be out of our current rental by October of this year.

I have a meeting this week with a loan officer for a mortgage. She pulled my score end of last week to see what needs to be done.  Stupidly, we went to an open house and fell in love with the first place. So if this goes, we already have a place in mind.   My scores have just been pulled by a lender and are:

Beacon 5.0= 579

FICO-2= 630

FICO Classic 04= 605   (I guess they don't go buy Transunion? Experian? And Equifax???)

House we're interested in is $214,000 Hoping to get them down to $200,00 or $205,000 if we are approved.

I plan on funding the down payment (not sure how much) with a loan/borrow from my 401K as there are no penalties/paying myself back ,etc. I have up to $24,00 I could borrow from it, and it could be paid back over 15 years or more through my paycheck. Payments would be pretax.  

I have been with my company for 20 years, which I feel is a strong work history.

Make $67,000/year plus bonuses.

Have a car loan that will be paid off in 7 months: Balance $2863 Pymnt $400/month It was reported 30 days late last May

Have a GE capital line of credit line of $7500:  Balance is $4576 Pymnt $175/month but have been paying more to get my ratio down. Never been late in 2 years I've had it..

Have a Capital One credit card line of $300: Balance is $0 as I use it once and pay it off every month. Never been late. Have had it since 2006

I had 12 different small medical bills go to collections. They have been completely paid off and show paid off. We were making payments to the Dr. and thought these were included. We did not know they were not included on the payment plan, so went into collections. I am including what happened in a letter to the underwriter.

The loan officer was suprised my credit was as low as it was, and told me  to open a secured card to raise our credit score quickly as it will will quickly give us a bigger debt to credit line ratio. The card is through my bank, $500. (or will that hurt us, opening new credit so close to getting a mortgage, she says no, it will help)  We will use it once a month for gas, pay it off. 

But do I even have a chance? Do I have to wait till it's been a complete year for that late car payment? I should have never went to that open house. LOL.

[CreditGuy03]

You would be better served to get rid of that car payment which will give you a better DTI

[ShanetheMortgageMan]

Once that car loan late payment is over 12 months old you should have a good shot at getting approved.  Debt ratio looks fine.  Opening a new credit card will probably ding your scores, so for the first few months your scores could be lower than what they are now, but as long as you keep the balance low then your score will increase at a faster pace than it is now.

The scores are Equifax, Experian & TransUnion, it's:

EXPERIAN, FICO v2

TRANS UNION, FICO Classic 04

EQUIFAX, BEACON 5.0 FICO

[StartingOver10]

You would see a large jump in your score by paying down the GE Capital LOC to leess than $675 balance and zero on your other cc accounts.

Right now your balance on the GE Cap LOC is over 61% and that is dinging your score quite a bit. The quickest way to increase your score is the drop your utilization down to less than 9% of your credit line on one card and zero on the others.

Naturally the 30 day late last May is hurting you too as mentioned up thread: once that hits a year it ought to hurt less.