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Help need! Path to getting approved for a mortgage loan.

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Anonymous
Not applicable

Help need! Path to getting approved for a mortgage loan.

Hey everyone. I am new to the form, so I think this goes here.

I'm trying to get advice for the next stes to build my credit so I can get preapproved for a loan and have a lower interest rate. i will focus on my information since I will be the primary applicant and I am more focused on my credit score than my wife's becuase her credit is better than mine.

I graduated college last July and my wife graduated in December. I got a job right out of college where I make around $51k. My wife doesn't work at the time and I am unsure if/when she will contribute income.

Current Scores
TU - 684
EQ - 680
EX - 675
Desired Scores to Apply for Mortgage Loan
TU - 700
EQ - 700
EX - 700

Student Loans
Currently I pay $145/month to my student loans. The age is 5 years, 7 months.

Auto Loan
We have a auto loan that I pay $250/month on. The age is 8 months.

I have 5 open credit card accounts. Total utilization is 40%.
Chase Slate (4 months) - Used this to transfer balance. Currently has a CL of $3200 and is 90% utilized.
Best Buy Store Credit (7 years, 1 month)- Had this one for a while. CL is $4200 and is 4% utilized with plans to pay off next month before interest kicks on my last purchase.
Captial One Visa Platinum (9 years, 2 months)- Has $1850 CL and is 4% utlized. I only use this to pay my monthly storage fee of $70.
Credit One Bank (8 years, 9 months)- Has a CL of $1700 and is 2% utilized, but I will pay it off next payment.
Wells Fargo College Card (4 years, 1 month)- Has a CL of $1700 and has a balance of $0.

AMEX BCE (1 month) - Has $5000 CL.

Care Credit (1 month) - Has $1500 CL and is 27% utilized. Used for a dental procedure and wanted no interest. Probably wasn't be best choice, but I did it.


Late Payments 206/213
I have 6 late payments. I am considering calling and trying to get them to remove these, but I don't really know the proper steps to do this or what I should ask.
Captial One - 3, these date Mar 15, April 14, and Jan 14.
Best Buy - 2, these date Jul 15 and Dec 14
Wells Fargo - 2, these date Jun 15 and April 14

Age of Loans
The average age of my loans are 4 years, 6 months.

Credit Inquiries
On TU I have 5 that are currently showing and on EQ I have 4 that are showing.

I don't really now the next steps to take to improve my credit. I want to have at least a 700 credit score before I go an apply for preapproval. Any advice for what I should do to get my credit to increase would be greatly appreciated.

Message 1 of 8
7 REPLIES 7
Anonymous
Not applicable

Re: Help need! Path to getting approved for a mortgage loan.

The first thing I would do is pay down your cards as much as possible, especially that Chase card.  You'd be surprised at the score boost you get once your utilization gets lower.  10% is ideal but getting below 30% is good too and will help.  Also, are those your mortgage scores or just your FICO8?  My mortgage scores are all higher than my FICO8's; my EX mortgage is actually about 80 pts higher than my FICO8.  That may not be the case for you, but it's definitely good to check to see where your actual mortgage scores are and go from there.

Message 2 of 8
Anonymous
Not applicable

Re: Help need! Path to getting approved for a mortgage loan.

I agree with the previous poster. Pay off all cards except for one. Let one report a small balance. Bring down your utilization between 1-10%. You'll get a big boost in your scores. Order the 3b report here and see your actual mortgage scores. Look for the scores that are "Commonly used for mortgage lending". Sort them from highest to lowest and used the second highest score. That will be your middle score and what a lender will use. Otherwise you look fine imo. The experts here could have a bit more insight.
Message 3 of 8
Anonymous
Not applicable

Re: Help need! Path to getting approved for a mortgage loan.

Would it better to pay down the Chase card first or pay off the cards with balance and then pour everything into the Chase?

Message 4 of 8
Anonymous
Not applicable

Re: Help need! Path to getting approved for a mortgage loan.

You didn't say when you are looking to buy? Next week or in a year?

Assuming that the slate is at 0% on the BT, I'd pay everything else off and focus on the slate last. Even though the utilization on that card is killing you, get the other cards your paying interest on, paid off. Then you only have 1 cc reporting/to take care of for UTI purposes.

That said, the lates that are less than 1 year and 2 years old are hurting you too. Unless you can GW them, they'll just have to age.

Are you going FHA or conventional? If FHA, getting your scores to 700 isn't really going to matter a whole lot. If those are your mortgage scores, a 680 mid-score is more than enough to qualify for a good rate. If conventional, not sure if 700 is going to be enough to make a difference like a 740 might. I'm not familiar with the ranges they use to determine rates and mortgage insurance. Just putting that out there in case your only concern is your scores.
Message 5 of 8
Anonymous
Not applicable

Re: Help need! Path to getting approved for a mortgage loan.


@Anonymous wrote:
You didn't say when you are looking to buy? Next week or in a year?

Assuming that the slate is at 0% on the BT, I'd pay everything else off and focus on the slate last. Even though the utilization on that card is killing you, get the other cards your paying interest on, paid off. Then you only have 1 cc reporting/to take care of for UTI purposes.

That said, the lates that are less than 1 year and 2 years old are hurting you too. Unless you can GW them, they'll just have to age.

Are you going FHA or conventional? If FHA, getting your scores to 700 isn't really going to matter a whole lot. If those are your mortgage scores, a 680 mid-score is more than enough to qualify for a good rate. If conventional, not sure if 700 is going to be enough to make a difference like a 740 might. I'm not familiar with the ranges they use to determine rates and mortgage insurance. Just putting that out there in case your only concern is your scores.

We would be looking probably within the year. We are thinking about building, but not really sure the process for that. 

 

I think we would probably end up going with an FHA loan. I wasn't really sure about the difference the scores would make. For me personally I just want to get above 700 before applying. 

Message 6 of 8
Studio90x
Contributor

Re: Help need! Path to getting approved for a mortgage loan.

It's better to pay those with balances then pour everything into Chase.  

 

Google Snowball Debt Method.  Paying small balances off first while still making the minimun payments to all cards with a balance and applying the minimum payments you had on previous cards with balances to the card with the highest balance.

 

Hope this makes sense.

 

EDIT:  When applying for a mortgage, scores aren't the only factor.  Having your overall debt paid off is better so that it isn't factored into your DTI.  The more debt you have, the less house you'll be approved for.

EQ8 - 696 TU8 - 700 EX8 - 683
Message 7 of 8
Anonymous
Not applicable

Re: Help need! Path to getting approved for a mortgage loan.

That is what I was/am currently doing to paydown. Thanks!

Message 8 of 8
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