Looking to buy in a year or so...

Anonymous · ‎09-06-2015

So heres a little background.

I make 70k a year. Total DTI payments are about 685 a month. Credit scores currently are 612 experian, 595 TU, and 575 Eq. Keep in mind these are with creditcards all sitting at 98% due to us using them to help moving into our current rental. I should have cc's paid off within 6 months down to the 10% range i plan to keep them at. My student loans have 1 payment left which will also drop my DTI.

I had a chapter 7 in 2011, and currently only have medical collections for medical debt from when i did not have insurance totalling around 2500-3000.

Planning on using a FHA, and not including my wife on the loan as she is a stay at home mother and no income, however she does have some past debt. So i am hoping that i do not have to include her on the loan process.

Any thoughts or opinions?

Thanks in advance

Anonymous · ‎09-06-2015

Are those credit scores FICO 8 or the mortgage credit scores? Paying down that utilization below 10% should bump you up another 40 points or more, if you can, try to PFD that medical collection if possible. How many credit lines do you have? What kind of credit mix do you have? What kind of down payment are you expecting to have? Total credit utilization? What is the price range of the house you want to buy? Any recent late payments or credit inquiries? Lots of questions to get answered before we can help you get an accurate depiction of what to expect a year or so from now. Having the house price you are trying to get will help determine future DTI. Thanks.

Anonymous · ‎09-06-2015

Sorry, Yes Fico 8 as i have not got a recent report of the other factors.

I have 4 credit cards, 2 car loans, and a student loan with 1 payment left.
I am looking at about $250k for a house and im hoping to have $12.5k to $15k down as well as another 5k for closing costs if needed.
Total credit utilization after i pay down my credit cards will be 10%, and never missed a payment on any student loan, car payment, or credit card.

I have 5 credit inquiries, in which 4 i believe will be gone by the time we look for a house.

In a year my DTI payments are going to be around $600 with a monthly income before taxes around $5500 - $6000 a month depending on my overtime schedule.

Hope that helps!

Anonymous · ‎09-06-2015

That helps a lot!! Thanks!! The mix of credit accounts will help, your DTI looks good as I believe the current FHA DTI limits are 31/43 and using your numbers, it looks like you would be around 26/38 assuming the mortgage would be in the neighborhood of $1500/month, although the exact numbers will obviously vary due to interest rate, HOA fees, PMI, etc. Minimum FHA credit score is 580 according to FHA.com. You would want to check your mortgage scores eventually as I've seen other posters say their mortgage scores have been dozens of points lower than their FICO 8 scores. Keep your credit clean (no lates, C/O's etc) for the preceding 12 months before applying for a mortgage and you should be in real good shape. I am no expert by any means, but have heard of individuals get homes with less going for them than you. Just work on getting the credit score up to get the best rate you possibly can. There's no such thing as a sure thing in the housing game until they hand you the keys lol. See if you can possibly get a pay for delete for that medical collections although medical collection are not a huge obstacle when using FHA loans.

Anonymous · ‎09-06-2015

Thank you for your reply.

My two biggest concerns were the Collections & weather or not i have to included my spouses debts on the loan application.
Hoping everything will be fine.
And as for my last report, they were about 10-12 points lower on the mortage lender score. Hoping that if i can cut the cards down to the 10% i should have a rate of 650-665 and if stays same for mortage calc ill have atleast a 620. So i am hoping all is good

Anonymous · ‎09-06-2015

Sorry for spam. I should also mention that the credit card debt totals 2250 currently. So its not like i owe that much anyways

bbb925 · ‎09-06-2015

What state will you be buying a home in? That will determine if you have to add your spouse or not.

Anonymous · ‎09-06-2015

Just chiming in as a fellow repairer working toward a mortgage. I'll be going USDA, but guidelines are fairly similar. My mortgage scores were 565 600 611 on July 31 2015 (lender pull). I have an auto loan with a 495 payment and a CC UTI of 87% with total limit being 2600 across 4 cards. As of 9-1-15, my UTI is down to 55% and my mortgage scores are 601 624 and 645 (my fico 3B). I have changed nothing other than the UTI and gained that many points. My fico 8's are 628 629 and 642 as of today. My report is far from clean, with 9 collection accounts (6 are TSI for med collections) totalling about 2000. Payment history is perfect since getting my car loan in 12-2012. I'm amazed at the increase in just one month. I think you will easily get your score high enough for pre-approval. I should also note, my oldest positive account is 12yrs with an AAoA of about 5 years.

So, long story short, start paying those CC's down and you'll likely be shocked at the increase. Seeing the increases every month has really helped keep me motivated to keep going. Im shooting for a 640-660 mid mortgage score before I start the mortgage process. Which at this rate, could be by halloween. Im month to month at my current place, so I'm not on any set timeline.