Getting a mortgage with a thin file??

[amclaughlin42]

So Me and my wife are needing to be out of our rental home by April its when our year lease is up, and instead of renewing we want to buy, we were hoping get USDA Direct 502 Rural Housing Development Loan. I was told that they like to see 2 years of credit history. I have 2 years of employment history but not credit history. I worked my way to get an associates degree, as well bought my own car, before my 2nd year of college I got my first job working at walmart about 32-36 hours a week. After graduating right away I got a new job working in a factory right after getting married. Then at the end of April, I took a better job making more money, but at another factor in the same line of factory work which is car manufacturing. While working at my previous employer in February I got my first car loan, I have a high interest rate 21.13% and I have been paying on my loan on time every month. As well as I got my first SECURED Credit Card through Capital One in January 2015 I have also made every payment on time. We wont be applying until December/January. So I will be paying on both of my lines for a year, I am paying off a collection a Directv bill that got forgotten about when my brother in law unexpectedly passed away. It will be paid off completely in a week. My credit card will be paid down by then as well, I only have $200 credit line on the card. I also have Synchrony Financial store card through Simply Mac, to finance a MacBook for my wife. That card has a $2000 line but the macbook was $1767, we paid 67 and have a remainder $1700 even to pay on it, we just got our first due date of November 7th. 

My current scores are Fair but not good, they were almost a 700 when I first applied for my synchrony card, with getting a new credit line, which just has showed on my credit report but shows a $0 balance. Shortly after that, which was about a month ago, the collection posted, and when I saw it, I immediately began paying on it. 

So as it stands

3 lines of credit-1 new.

1 collection about to be removed with 3 weeks time. 

I might add, I do plan on refinancing my car, I have tried once, but I was told that I needed to have my car longer before I refinance, so hopefully at my 1 year mark which is in Feburary.

Can I apply for a home loan at the beginning of 2016? Will it be possible with only a year worth of credit history?

[Anonymous]

They are looking for you DTI ratio. They want to make sure you have enough money to pay the loan. My husband and I closed on a mortgage in July. As stated in another post, all I had was a secured Wells Fargo credit card for less than a year. The credit limit was $600. I had a student loan that was late 3 times in 2014 but after the late payments I had nothing but good payment history for a little over a year. I also had a car loan which is 3 years old but I had 3 late payment for that loan in 2014. Once again all payments after the 2014 late payments were good so that was a little over a year of good payment history. The mortgage lenders went with the lower of both scores and mines was the lowest. Around 670 to 680. My husband score was around 700 with about 2 years of credit. A fingerhut account and a secured credit card. Don't be scared to try. I'm not saying that they don't look because it was the scariest thing we ever did. They wanted something everyday for the entire 30 days of our escrow. We were so annoyed, scared, nervous, and a ton more of things but in the end, they got us the loan. Closed on July 1,2015. It was an experience to go through. Maybe one of the scariest but I'm glad we did it. Keep making on time payments. Keep your job and you will succeed with getting your loan. All you have to do is try.

[amclaughlin42]

---

@Anonymous wrote:

They are looking for you DTI ratio. They want to make sure you have enough money to pay the loan. My husband and I closed on a mortgage in July. As stated in another post, all I had was a secured Wells Fargo credit card for less than a year. The credit limit was $600. I had a student loan that was late 3 times in 2014 but after the late payments I had nothing but good payment history for a little over a year. I also had a car loan which is 3 years old but I had 3 late payment for that loan in 2014. Once again all payments after the 2014 late payments were good so that was a little over a year of good payment history. The mortgage lenders went with the lower of both scores and mines was the lowest. Around 670 to 680. My husband score was around 700 with about 2 years of credit. A fingerhut account and a secured credit card. Don't be scared to try. I'm not saying that they don't look because it was the scariest thing we ever did. They wanted something everyday for the entire 30 days of our escrow. We were so annoyed, scared, nervous, and a ton more of things but in the end, they got us the loan. Closed on July 1,2015. It was an experience to go through. Maybe one of the scariest but I'm glad we did it. Keep making on time payments. Keep your job and you will succeed with getting your loan. All you have to do is try.

---

I meant the we possibly not have had credit long enough... Like maybe close to a year and thats it, You've had stuff longer than 2 years. Thats what I meant. I do want to try but if its not possible to get a home loan with less than 2 years of credit than I wont. My score should be at minimum a 680. I have a very secure job. I am always on time, never been late for a job or a payment. I do intend to keep it that way and thank you your comment has given me hope.

[cartwrna]

If you have a thin credit file, they can use other things to make up for that. Such as utility bills, rent verification etc. A friend of mine just went through this.

[Anonymous]

Also - contact a loan officer at your local bank.  Usually they will answer some questions for you and get you on the right track.    If you can - pull your 3B reports w/mortgage scores since it's a soft pull - and take them with you - so you can ask about any specifics.

I contacted mine and asked several questions about income qualifications, about a special first time buyer program in my area, and about a couple things on my report that she was happy to answer for me.  (specific overlays for the program I want to use)    This is allowing me time to clean up those 2 things out there and let my new credit cards age up (and make a few extra car payments) before I'll be ready in Jan or Feb.

[amclaughlin42]

---

@Anonymous wrote:

Also - contact a loan officer at your local bank.  Usually they will answer some questions for you and get you on the right track.    If you can - pull your 3B reports w/mortgage scores since it's a soft pull - and take them with you - so you can ask about any specifics.

I contacted mine and asked several questions about income qualifications, about a special first time buyer program in my area, and about a couple things on my report that she was happy to answer for me.  (specific overlays for the program I want to use)    This is allowing me time to clean up those 2 things out there and let my new credit cards age up (and make a few extra car payments) before I'll be ready in Jan or Feb.

---

Thanks for the suggestion, we will be doing that. But my file isn't so much thin as it is short. I have an auto loan I have been paying high interest on since Feburary and a Credit card since January. And I have one more card that was just opened.. but all of this is under a year. I have only lived at my rental for 6 months, so I would have to get my previous landlord, which was  my wifes step dad.