12-10-2010 10:48 AM
This has been a HUGE journey for me. Paying off my collections, increasing my score by over 80 points and finally being approved for an FHA mortgage!
However, because I wasn't approved through automated underwriting and my credit history was far from perfect I had to provide "alternative credit references".
Somehow I had never heard from my LO or anyone else that I would have to prove:
Rent paid on time
Utilities paid on time
and one other bill paid on time
ALL FOR A YEAR!
I figured they only went by my credit report so very luckily I didn't have any lates. However, in the past, utilities I would pay a little late... luckily my past year was clean!
Just because of all the help here in these forums I received, thought I would put this out there again that if you don't have perfect credit make sure you have THREE GOOD CREDIT REFERENCES that you can show paid on time for a year (rent and utilities are mandatory I think)
Good luck everyone and don't give up!
12-10-2010 01:20 PM
Just to clarify, any time you go for a mortgage, they are going to want to see you past years rental or mortgage history and they will expect to see zero lates. (late being over 30 days late)
It is also more common for them to request letters of credit from utilities sometimes even when you have 3 solid credit lines. So all buyers should assume that anything that can show your payment history (utilities, rent, etc) may be on the table during underwriting. Hell, I even had them request my insurance history becasue on my bank statements they notice that my car insurance payment spiked one monht (renewal (2 months worth) is always higher than the other 10 months) and the UW saw that and requested proof that I had not missed a insurance payment and then doubled it up...
So, again, if you are in the market to buy, assume that they are going to pull all records that are avaialble to them to prove credit. Even more so for lower FICO or higher DTI type situations. Make sure anything they may ask for, you can prove 12 months clean history. In most cases it will not come up. But the rub is that when they ask for something and if it comes back bad (say a late utilities bill) the UW is going to assume you were robbing peter to pay paul and slide under the UW guidelines. So, be prepared.