I need help to figure out how to get a FHA home loan starting the process in Dec. I am going to lay everything out there and would like some step by step advice (as much as possible).
Credit scores- TU 555(myfico) EQ ?? EXP 511 (fako)
Chapter 7 Bankruptcy discharged 08/08
Credit history from Myfico says 7 years
Negatives on the three reports are:
Auto loan- 9112.00 opened in 07/09 repossession
First premier- credit card 744.00 date opened 12/08 charge off
HSBC bank- credit card date opened 09/08 charge off shows 0.00 balance
Pathfinder- education loan (not government cdl driving school) 6188.00 date opened 12/10 charge off
Verizon wireless 878.00 date opened 02/06 sent to collection agency
HSCB- date opened 07/06 discharged in bankruptcy
Designed receivables- collection account date opened 01/08 discharged in bankruptcy
FRDF- charge account date opened 07/06 discharged in bankruptcy
ACC- collection agency date opened 05/08 discharged in bankruptcy shows a KD for sept. 2010 on report
Second auto loan- date opened 04/06 discharged bankruptcy
First national bank – date opened 01/05 discharged in bankruptcy
Midland funding- collection agency for HSBC- date opened 12/11 786.00 shows up to 180 day lates
Webbank- date opened 01/05 discharged in bankruptcy
Credit protection- collection agency for cable company date opened 01/10 ( I have paid the cable company and disputed this on reports still hasn’t come off)
Hunter warfield- collection agency date opened 10/07 discharged in bankruptcy
Anderson financial- date opened 03/07 discharged in bankruptcy
Dell financial services- date opened 01/05 discharged in bankruptcy
Positive accounts-
Capital one- Au on wifes credit card has a balance of 757.09 limit 750.00 paying down to 66.69 in two weeks. Min payment 15.00
Credit one- Au on wifes account balance 305.07 limit 300.00 paying down to 32.07 in two weeks. Min payment 25.00
Also have been preapproved for capital one secured card in my name & in two weeks putting down a $1000.00 to open account.
I also have about 16000.00 in student loans that are still in school status and about 7 student loans showing 0 balances and transferred to another lender.
Income/employment history-
Started driving in Dec. 2010 then transferred to a non driving job in July 2011 the company went under and went back to driving in Feb 2012 no break in employment.
My income has stayed steady through all jobs and I currently make 53000.00 a year before taxes every month I get a bonus of about 200.00 and every six months I get about a 500.00 bonus. I am a w-2 employee.
DTI- I don’t know what this would include so help with this would be great.
Assets/Reserves-
We should have about $5000.00 saved if not more by Dec. 2012 we own our vehicle and nothing else.
Location/ Property/ Value-
We are looking to buy a SFH in Brandon, Fl 33511 for 150,000 or less. I am a first time homebuyer and my wife will not be included on the loan since she is a student/Stay at home mom.
Ok so here is what is left we currently live in Indiana and the company i work for doesn’t have a place in Fl. I will be joining another driving company when we purchase our house.
Do we tell them this or no?
Also can we get approved for a loan before my two year employment if it will hit the two year mark before closing? Or do I have to wait.
How should I go about bringing up my credit to become FHA loan ready?
What will need to be paid and what won’t?
Also i was unemployeed and on unemployment from 12-08 to around 11/10 which is why a lot of my accounts defaulted.
Any other advice that I didn’t mention please let me know.
Thanks in advance & sorry so long!!!
Starting Score: TU 555 EQ ?? EXP 511
Your going to have some challenges. The 180 day lates look to be recent(opened 12/11?) or is that the CA opened? How long ago was your last reported late? FHA is trying to start a new requirement that all collections must be paid or in a payment plan if the total is over $1k. The repo is also a big issue. Is the repo amount $9k? Big balances like that terrify underwriters as they scream lien on the house. They want to make sure they are the first ones paid and large outstanding derog balances put that at risk as a lien can be obtained against the home.
Another issue is derogs after BK. Lenders absolutely hate to see this. It just says to them this person didn't learn from their mistakes/issues that lead to the BK and are still mismanaging things.(I'm not saying you are, life happens. I'm just saying how lenders and creditors look at it)
Cash is also going to be a problem. FHA requires 3.5% down. So the down payment on a $150K home is going to be more than that. Then you still have to account for closing costs which could push $10k. Closing costs can be paid by the seller as part of the deal or by the lender in exchange for a higher rate.
Are you finances truly in order for you to be able to take on a loan? Right now you have a card that is over limit. Are you truly in a position to get into a home?
Please don't take any of this personally. I'm not criticising or insulting you. I just want to give some realistic issues you are looking at in the process. Good luck.
Dojowah, I agree with what Boomhower said. I also filed BK around the same time you did so I completely know where you are coming from.
However, creditors are going to be a little nervous about extending credit to you currently, given the fact that you have had more credit issues post BK. It seems like the mortgage requirements are getting more and more difficult.
I think you can get a house financed by the FHA, I just don't realistically think you will b ready to start the process in December. Could you guys possibly rent while you live in FL to give you some more time to work on your credit. My recommendations are as follows
1. Pay off your credit card and maintain less than a 9% utilization on them. It is generally adviced to only charge what you can afford to pay off when the statement comes in.
2. Build an emergency fund. Many people forget this important step. Like you know, life happens when we least expect it. It is helpful to have 3-6 months of living expenses saved off in an account somewhere so that you can live off of if you need to.
3. Start writing GW letters for the lates you incured post BK. It would help you a lot if those negative marks are removed. Search on these boards for examples of how to write GW letters.
4. See if you can work with the collection agencies to delete the collection accounts after you've paid them. Make sure they have something in writing telling you they will delete the accounts. Have this documentation in hand BEFORE you pay them off. Search these boards for PFD letters (pay for delete letters)
5. Keep your positive accounts positive. Never, ever, ever be late on a payment. Keep your utilization low. You will be amazed to see how much your score will go up just by paying those balances down. Don't apply for any new lines of credit at this time.
6. Be patient. Repairing one's credit takes a lot of time and dedication. It usually takes a little while for one to get into credit mess. Likewise, it is going to take time to fix the mess. Don't get too anxious. Good credit wil come with time and dedication
Good luck and spend time on this website. I didn't know anything about credit and only found out about MyFico after I've ruined mine. Like you, I still have a long way to go but I can also look back and say I've come a long way.
boomhower wrote:Your going to have some challenges. The 180 day lates look to be recent(opened 12/11?) or is that the CA opened? How long ago was your last reported late? FHA is trying to start a new requirement that all collections must be paid or in a payment plan if the total is over $1k. The repo is also a big issue. Is the repo amount $9k? Big balances like that terrify underwriters as they scream lien on the house. They want to make sure they are the first ones paid and large outstanding derog balances put that at risk as a lien can be obtained against the home.
Another issue is derogs after BK. Lenders absolutely hate to see this. It just says to them this person didn't learn from their mistakes/issues that lead to the BK and are still mismanaging things.(I'm not saying you are, life happens. I'm just saying how lenders and creditors look at it)
Cash is also going to be a problem. FHA requires 3.5% down. So the down payment on a $150K home is going to be more than that. Then you still have to account for closing costs which could push $10k. Closing costs can be paid by the seller as part of the deal or by the lender in exchange for a higher rate.
Are you finances truly in order for you to be able to take on a loan? Right now you have a card that is over limit. Are you truly in a position to get into a home?
Please don't take any of this personally. I'm not criticising or insulting you. I just want to give some realistic issues you are looking at in the process. Good luck.
Thanks for your reply the opened account on 12/11 is a collection agency. ANything reported late on my credit is from collection agencies or at least 2 years ago for original accounts. The loan for the car was 12k it is now a balance of 9k. All negative accounts after bankruptcy are due to job loss. I was trying to rebuild my credit after bankruptcy & then lost my job. Couldn't find any work for two years so I took cdl class then started driving have been employed now for almost two years. It wasn't mismanagement (I get what you are saying though) I thought with FHA if you could prove this which I can from unemployment benefits you could get a loan? We will only buy a house if the seller will pay closing also we want to start in DCE not necessarily buy in DCE. The card is over the limit due to interest charges but will be paid almost completely off and we have not used this card in a while no need too. ALso a home loan would be less than rent we pay now.. Giving us more money to save. Thanks for the help
daisydvm wrote:Dojowah, I agree with what Boomhower said. I also filed BK around the same time you did so I completely know where you are coming from.
However, creditors are going to be a little nervous about extending credit to you currently, given the fact that you have had more credit issues post BK. It seems like the mortgage requirements are getting more and more difficult.
I think you can get a house financed by the FHA, I just don't realistically think you will b ready to start the process in December. Could you guys possibly rent while you live in FL to give you some more time to work on your credit. My recommendations are as follows
1. Pay off your credit card and maintain less than a 9% utilization on them. It is generally adviced to only charge what you can afford to pay off when the statement comes in.
2. Build an emergency fund. Many people forget this important step. Like you know, life happens when we least expect it. It is helpful to have 3-6 months of living expenses saved off in an account somewhere so that you can live off of if you need to.
3. Start writing GW letters for the lates you incured post BK. It would help you a lot if those negative marks are removed. Search on these boards for examples of how to write GW letters.
4. See if you can work with the collection agencies to delete the collection accounts after you've paid them. Make sure they have something in writing telling you they will delete the accounts. Have this documentation in hand BEFORE you pay them off. Search these boards for PFD letters (pay for delete letters)
5. Keep your positive accounts positive. Never, ever, ever be late on a payment. Keep your utilization low. You will be amazed to see how much your score will go up just by paying those balances down. Don't apply for any new lines of credit at this time.
6. Be patient. Repairing one's credit takes a lot of time and dedication. It usually takes a little while for one to get into credit mess. Likewise, it is going to take time to fix the mess. Don't get too anxious. Good credit wil come with time and dedication
Good luck and spend time on this website. I didn't know anything about credit and only found out about MyFico after I've ruined mine. Like you, I still have a long way to go but I can also look back and say I've come a long way.
Thanks for the help I really appreciate the advice. Kinda got my bubble busted but will keep trying to fix things. Trying to get my wife to Fl with family as she is up north with the kids by herself so i am anxious
Rent in Fl is too much to move there
Thanks again
Starting Score: EQ: 532, EX: 569, TU: 621 (All lender pull 10/15/11)
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