Mortgage Loans

[Cmeq]

My girlfriend (soon to be fiance) and I are seriously looking into purchase a home. We would like to utilize the FHA loan option. Our combined income total over $70K with very little debit. I have been with the same employer for 5 years she has been with her employer 7 months. The problem is that my FICO score is 580 and hers is 750. Basically mine is bad with many late payments about a year ago and hers has no late payments. I pulled my credit reports and found debts that I forgot or ignored and forgot many years ago. I am negotiating to pay these off in full and have the account reported as "Paid as agreed".

We have way more than the 3.5% for a down payment. Currently we are living rent free as a house sitting gig and have been putting away a mortgage payment ($1500) plus an extra $500 to see if we can survive and we have been fine for the past 6 months

Do we even have a shot at getting a loan in this economy?

Thank you!

[WannaHouse]

You should have a decent shot. There is alot more that needs to be asked/answered though.

What you need to work on is any judgements you may have, and anything in the last 1-2 years on your reports that is negative. The old collections are not going to hurt you as far as getting a house. They want to know that you pay your bills now (in the last 12-24 months) and you can not have unpaid judgements or tax liens.

Hope that helps some.

[Cmeq]

Thank you for the quick response Kathy! 

I have no judegments and have been paying my billd ontime for the past eight months. I know that lenders want 12-24 months of zero late payments and have worked ot ways to insure that I will no longer have late payments.

Any furher thoughts?

[WannaHouse]

I think if you have a good explanation for the lates and enough cash down and reserves, you should be ok.

I am no expert in this area, but it looks pretty good.

[DallasLoanGuy]

shoot for 620 score for fha.

it's coming 

[serenegal]

Hey there!  New to the board, but couldn't help ringing in on this one...I know one thing that they have asked me (I'm currently in escrow as of today!) which threw me for a loop...they (meaning FHA) requires 12 months of cancelled rent checks...not receipts, but the actual checks (or copies thereof).  Now, this may have been because my FICO is not so good...but just wanted to give you a heads up in case they ask for that!

[ShanetheMortgageMan]

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serenegal wrote:
Hey there!  New to the board, but couldn't help ringing in on this one...I know one thing that they have asked me (I'm currently in escrow as of today!) which threw me for a loop...they (meaning FHA) requires 12 months of cancelled rent checks...not receipts, but the actual checks (or copies thereof).  Now, this may have been because my FICO is not so good...but just wanted to give you a heads up in case they ask for that!

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Sometimes rental history can be asked for if you do not have enough established trade lines and are going for a manual underwriting approval.  Then the rental history can substitute as a non-traditional trade line.  Some lenders also require rental history if you don't have at least a certain FICO score too.  Still, some lenders won't require rental history at all.  Just depends on who you go with.

[Cmeq]

They asked for canceled rent checks?????? WOW! Well, my rental history is flawless but do not know if I can produce actual copies of cancelled checks. Hmmmmmm interesting

[ShanetheMortgageMan]

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Cmeq wrote:

They asked for canceled rent checks?????? WOW! Well, my rental history is flawless but do not know if I can produce actual copies of cancelled checks. Hmmmmmm interesting

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Call up your bank, they usually have cancelled checks available for several years.  Might take them a week or so to get them, and perhaps even a $ amount per cancelled check, but they should have them.