Minor Glitches and Mortgages

[dcp]

Hi all,

I'm trying to figure out what  effect  certain minor credit issues might have on mortgages.  My fiance & I are looking into buying a house and financially I think we are in a good situation.  The loan amount we are looking at is between $300 and $350k, and our combined income is about $250k/yr.  Her scores are 780+ and mine are 665 (TU) and 672(EQ). 

I had a collection reported about 3 months ago through a dispute over returned cable company equipment in the amount of $50.  I have paid that amount (actually twice now - the reason for the dispute). Additionally I have a charge off of $183 from 27 months ago (strangely also a cable equipment issue and also paid off), and a 30 day late payment on a car loan from 2005.  Other than that, no baddies.  On the recent collectio my scores dropped almost 30 points from about 710.  Haven't pulled them sense.

My initial thought is that while the baddies are there, they would be considered very minor by a loan officer on review, but I'm worried that the scores are a barrier to entry.

[BrianB_The_Loan_Professor]

In a situiation like this everything is taken into consideration - The first thing you need to do is to get it oput of dispute that will cause a denial for a conventional loan and cause an FHA loan to be down graded to a manual underwrite (taking away the advantage of utilizing the results of an automated underwrite) 

The Loan Officer does not have any say these days all loans go through automated underwriting where an initial decision is made - if everything checks out there alive underwriter will compare documentation to support the data put into automated.

The fact that the rest of your scenario sounds so good and it was a one time issue that has been paid there is a real good chance that it will not be a big deal. Sometimes the system can be picky but not too often does something like this cause an issue - 

B