Mortgage - Approval or Trouble?

[nycsimone]

Just a little info about me: Current credit score: 650-670 depending on CRA Negative info: None. Everything shows on-time. Perfect payment history. Inquiries: About 15. Several were for when I bought a new car this spring. Only 1 new account in the past year. Debt: Currently about $10k in CC debt, that comes out to a util of 60%. Cash available for downpayment: $10,000 Yearly income: $60,000 from full-time employment, been there 8 years. House prices: Looking at $160-$180k. Would like to do a 5/1 ARM. My credit score is in the mid-600s but I have no doubt it will go up to over 700 if I get my util down to under 20%. The things hurting me is that my open credit cards are mostly 2-3 years old and I have very little history beyond that. I have a paid off car loan from 2005 and a Wal-Mart credit card that I closed in 2010. How much do inquiries hurt? I know it's only 10% of the credit score...but how will lenders see that? I'm looking at a February-March timeline for buying the home. I can get my CC debt down to about $8k on my own and then will use my tax refund & a bonus from work to get it down to $2-$3k. Not the wisest strategy but...I think it will work. Any thoughts or suggestions?

[sports1965]

I am no expert but you should have no problems getting approved

[ShanetheMortgageMan]

Credit history will be fine.

Debt to income ratio should be fine too.

If you can get your scores up to the 700's then I'd recomment conventional financing over FHA.  Conventional will require a 5% down payment, and you also have to consider closing costs too (you can always ask the seller to help you out with closing costs).

Other than having to explain what the inquiries were for, and if any new debt resulted in them, then inquiries have minimal impact other than what they do to your credit score.

I think your plan should work out.

[nycsimone]

Does anyone know who has the lowest rates on a 5/1 ARM? I'm also interested in one of those loans that have $500 or less in closing costs. Any advice?

[ShanetheMortgageMan]

Often credit unions offer very low ARM rates.  I am not sure who is offering the lowest though.

[Anonymous]

Your credit history and other details look fine and I don't see anything that might cause trouble in your mortgage plans.