Hoping to qualify for first home loan through FHA

[Binx12]

1. Credit.  According to Capital One, 627 as of April 2014.  Since then I have PIF 2 medical bills and settled in full on 1 collection. All that is left on there now is 2 medical bills that I have been paying monthly on for a few years. Credit utilization is aroun 40% and decreasing around 8% per month.
2. Income.  Gross Monthly income is aroun 11k and will be going up to 13k in aprox 60 days
3. Source of income.  Base income from hourly position.
4. Monthly debt payments.  Student loans are 158.00 per month, credit cards are 250.00 per month minimum payment( I normally pay around 1k month towards them), We currently rent, which is 1100.00 per month
5. Employment I have been full time for just over 2 years with this employer
6. Assets/Reserves.  Aprox. 15k in retirement acct, 5k in savings acct that I add 1k to every 14 days.
7. Location.  Ohio
8. Property.  Single family house built within the last couple years
9. Value.  Not looking to spend more then 290k. 
10. Occupancy.  Primary residence
11. Transaction Type. Purchase

 We have been looking at homes for the past couple months and have finally found a couple we like. I was planning on contacting a few lenders next week to get the preapproval process started. Any advice would be appreciated.

Thanks

[StartingOver10]

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@Binx12 wrote:

1. Credit.  According to Capital One, 627 as of April 2014.  Since then I have PIF 2 medical bills and settled in full on 1 collection. All that is left on there now is 2 medical bills that I have been paying monthly on for a few years. Credit utilization is aroun 40% and decreasing around 8% per month.
2. Income.  Gross Monthly income is aroun 11k and will be going up to 13k in aprox 60 days
3. Source of income.  Base income from hourly position.
4. Monthly debt payments.  Student loans are 158.00 per month, credit cards are 250.00 per month minimum payment( I normally pay around 1k month towards them), We currently rent, which is 1100.00 per month
5. Employment I have been full time for just over 2 years with this employer
6. Assets/Reserves.  Aprox. 15k in retirement acct, 5k in savings acct that I add 1k to every 14 days.
7. Location.  Ohio
8. Property.  Single family house built within the last couple years
9. Value.  Not looking to spend more then 290k. 
10. Occupancy.  Primary residence
11. Transaction Type. Purchase

 We have been looking at homes for the past couple months and have finally found a couple we like. I was planning on contacting a few lenders next week to get the preapproval process started. Any advice would be appreciated.

Thanks

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Welcome to MyFICO forums!

The lender is going to use your mid score on a tri-merge report. The Cap 1 score is NOT a FICO score. It is a FAKO score.

If you look on the Cap 1 site it tells you this:

Lenders use many scoring models to calculate your credit score. All of these methods take into account key factors, including your history of on-time payments and credit report details, to measure how likely you are to repay a loan. Your Credit Tracker score is based on the TransUnion New Account Model and is intended for consumer informational purposes only.

There is no relationship between a FICO score and other scoring models. Your FICO score, which is used by lenders, could be higher or lower. Pull your credit report at www.annualcreditreport.com so you know what is on the body of your report. Don't pull the scores there. Pull the scores here so you have a basic idea of where you stand.

The quickest way to bump up your score is to pay down your cc utilization. If you can do so, pay off your cc's except for one card and have it report 9% of the credit line or less. Don't do this if it interferes with your down payment and closing costs funds. What is your current utilization?

[Binx12]

I got my one myfico score off of here and equifax says 650

[StartingOver10]

I noticed you mentioned base income. Is your income base + commission? If so, the lender will use the income from your tax return after your business expenses (if any). Are you a W-2 type employee or 1099 type?

[Binx12]

My income is W2 type and the base is just my income before any overtime or holidays.

[StartingOver10]

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@Binx12 wrote:

My income is W2 type and the base is just my income before any overtime or holidays.

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Fabulous! You are in good shape. Apply happily

Check your FHA loan limits in your area to make sure you are in range. Consider applying for conventional too - you only need 5% down payment and the MI drops off after your LTV reaches 78% where as the FHA PMI stays on for the life of the loan.  Have the LO run it both ways for you to compare costs.

[DallasLoanGuy]

i agree. apply with confidence.

and do not discount conventional.... it can be a good solution

[dzemboc77]

Why is your credit score low ? Do you have any back collections. Keep in mind these would have to be paid prior to closing. Also Looking at your funds while your income seems great you will need between probably 10-15K to close . Judging by your funds you will be cutting it pretty close. Also what you will or maybe make 2 montsh from now has no factor on your loan. I would Purchase something based off what you can afford today. That being said you wont have much of a savings left over if you lost ur job ect..... These are things to keep in mind. Any house unless its being built new you will want to spend $$ on paintings or changing things that will add up for sure to a few thousand bucks.

I am closing at the end of the month FHA.  I'm rolling 7.5k closing cost into my mortgage and still need to bring $7k with me not including my 1k depost that was already cleared, $500 out of pocket for the inspection, and $470 for the bank apprasail. 

The nice thing with FHA as it will allow you to use a seller consession which was the only reason I got it. Otherwise I probably would have continued to build my score higher (med 640 right now) and save more in the bank. 

[ShanetheMortgageMan]

FHA doesn't require collections to be paid prior to closing, just a capacity analysis to be performed if the total owed on them is $1k+.