My fiance and I are meeting with a loan officer in two days, and I'm feeling anxious to get it (the likely rejection, that is) over with! We met with this same loan officer about a year ago--when my credit score was barely 600 and my fiance literally did not have a credit score since he's never had any credit cards, loans, etc. The loan officer told us to open some credit cards and work at it, which is what we've done. He seemed optimistic.
We spent the last year establishing/repairing credit.
I'm now at a 640 and my fiance has a 720. Obviously, his credit is much better and we're more likely to be approved based on his score & income alone. We both make about $52k (each) per year. His salary is actually over $60k since he has a lot of over-time, but I don't think lenders will take his over-time into consideration, which is fine. I am assuming at this point that lenders will be more interested in financing based on my fiance's numbers alone--he has two credit cards and that's it. Our main concern is lack of credit history. However, we've lived in the same apartment for 2.5 years and have paid $1300-1500 monthly and have record of that so we're hoping to be able to use that as a form of non-traditional credit. Other than the rent, all of the other utilities are in my name so they are ruled out if we apply for financing under his name alone.
My question is: How likely are we to get pre-approved?
I should mention that we do have the 3.5% down payment. We actually have about $12k in savings right now. We are looking for a home in the $220k price range.
We're willing to work at it until we can make it happen. This home-buying dream is almost 2 years in the making, and I know we're making strides in the right direction.
I would appreciate anyone's input, and would love to hear from others who have gone through this experience or are currently going through it..
Starting Score: 515
@Peter1142
Our loan officer said $12k is enough.
3.5% of $220k is $7700.
I realize there are other closing costs, but, assuming we are pre-approved, closing is still months away.
I had a recent promotion in my job and am currently putting away a significant chunk of change per month, so we could end up with closer to $20k at the time of closing.
Where I live, taxes on a $220k home come out to around $2700 annually, to be paid on a monthly basis.
@Peter1142
Thanks so much for your input. I will keep all of this in mind, should our pre-approval day ever come!
You & your husband will likely need to look for other ways to prove a credit history. I only had a single credit card with >1 year history when I closed on my home in July. Other accounts were newer.
I was able to provide proof of payments for other things & it wasn't an issue. I provided letters from 2 of my creditors stating that I had a satisfactory payment history. The letter needed to show that date the account was opened also. I used my auto/ renters insurance and I think my gym membership.
@Cubist
Thank you, that's really encouraging. Our rental payment history is history. We've been with the same landlord for over 2.5 years, and our rent is currently $1500.
If you don't mind my asking, which lender did you finance your home purchase with?