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Wife and I are wanting to get a house in the next 12 months. Sadly, we happened upon a random open house this weekend and it's our dream home, so now we are reviewing if we can make this happen.
Here is the situation
My mid FICO 08 is 634, hers is 674
our W2 from 2014 show combined income of ~74k
Our paystubs from this year show an increase in income that will put us around 95k by EoY
we have 12k saved/available for downpayment and closing costs.
The house we found is 182k
My credit report has 4 decent sized CCs from my younger days that are CO, unpaid, slated to drop off over the next 6 months.
LO says she thinks we can get approved for an FHA loan given all of this, but needs to run the numbers. What are your thoughts?
My 2 cents i was in the same boat as you and your wife my LO said the samething to me so running the numbers will tell you alot things you already no and dont no. Like paying off a collections could sometime hurt you lower your score sometimes not sometimes its best not to touch collections at the moment its a crazy game. but after you get the numbers run you should be fine my fico scores was the same as yours. GOOD LUCK
At least let the lo run your credit and give you a copy of the report. You will then know where you stand scorewise [the lower of the two middle score is the one that counts] and you will have an opportunity to review the contents of your reports for accurate reporting. That is a good place to start.
We are pretty solid on what is in our report, and want to be conservative with our hard pulls. We just want to know if it's worth getting hopes up here. Will it get approved, what kind of rate can we expect sort of stuff
@Anonymous wrote:We are pretty solid on what is in our report, and want to be conservative with our hard pulls. We just want to know if it's worth getting hopes up here. Will it get approved, what kind of rate can we expect sort of stuff
^^^Well, that is pretty much what a LO can tell you
We don't have enough info to give any guidance. You posted your FICO 08 scores and what we need are the mid score of your FICO mortgage scores - completely different than FICO 08. Look at the top of the page in the stickies to see the difference between the two scoring types. Pull your own scores from http://www.myfico.com/Products/FICO-Score-3-Report-View/ It will be a soft pull and not a HP.
Looking at your available cash - it looks like you would qualify for an FHA type loan, but you didn't provide your existing debt info to calculate ratios. That is a very important part of the qualifying process - income, debt, and credit.
Guessing you have the monitoring here based on your score list; for $41 you can get your mortgage scores (among a slew of others), and if an inquiry on each report is worth more than $41 to you, well worth the purchase in my opinion.
What's your debt to income ratio? Also, since you're considering applying and you have old collections, make sure you opt out five days before applying.
Ok, for those interested (thank you btw):
I reran my scores on myFICO to get the mortgage versions
Equifax(FICO5) 612
Transunion(FICO4) 694
Experian(FICO2)631
I got some Early exculsions on Transunion yesterday, damn does that look nice
I need to run my wife's but I answered one of the verification questions wrong and now we have to go through the whole thing, but I can't imagine her mid score will be lower than 631.
Our DTI is 13% as below
Gross monthly income last month: $8248 (do they use this to calculate annual income for grants and stuff?)
total debts (2 cars and studen loans): $1094
So the LO says a 631 will qualify, and we have the income. The house we want is 182k. There is still some ugliness on our credit reports we may need to explain I suppose.
My questions is, is it worth trying to get a few more points out of that mid score? how much swing in interest rate/approval odds will there be with a 650 vs a 631?
thanks again for all of the help!
if you are going FHA you should be fine - there isn't an interest rate difference to you between mid-score of 631 and mid-score of 650 (AFAIK).
Yes your gross income is used to determine eligibility of grant funds or dpa funds. Each program is a little different so make sure to pull up the qualifications for the program you are planning to use. The criteria usually is HH members and gross HH income and is restricted to certain geographic areas. HH= household. Even if only one is on the mortgage, HH income and HH occupants are used to determine eligibility and yes, even $1 over will knock you out of the running for either a grant or dpa.
You can take a stab at getting EX to early exclude as well. When I was down to my last baddie, I called ex. The lady told me exactly when she could do it for me. It was 7 days away called back a week later and got it done. It was much simpler with EX than TU, and just one month later. Cant say on EX as that last baddie never showed up there, but most people say EQ is more difficult.