Mortgage Preparation 2013

[EyesofTexas]

Me and wife plan to buy a home this year. Preferably in April-May and I want to make sure we are prepared.

Background info. We married April 2012.  I worked as teacher/coach for a private school for 33k  then got a better job in a public school and salary is about 55k. I have been teaching for 3 years

My wife is self employed and is a licensed hair stylist and makes about 30-35k per year. 

My credit score is 707 and my wife credit score is 617. My credit report is clean with no blemishes. According to myfico, only thing hurting my score is length of credit history. My wife has collections from about 5-6 years ago. Last year she opened two credit cards to build back her credit. Which worked because she was at 520. 

At this point is there anything that we need to do to be approved for a mortgage of about 150k in Texas? I'm assuming that we will have to take the FHA route. We have 10k saved as of now.

One of my concerns is my income. I now make 50k+ but didn't start making that amount till mid year, but I been teaching for last 3 years. What income will be counted for the mortgage process? The 33k or 50k+ income I make now?

Any help would be greatly appreciated.

[Mike_B03]

Not certain on the income but one thing to try and do ASAP is to bring up your wife's credit score. You'll both need to be over 640 I believe for an FHA loan.

You said her's is 617, is that Equifax or TransUnion? What's the score with the other one and what is it saying is holding the score back?

[EyesofTexas]

From what I understand and have been told by a mortgage lender is a 580 is required for FHA loan. Now this was last year and hopefully it has not changed. Her 617 is Eqifax. Past collections is holding her account back. 

[Anonymous]

The credit score needed for an FHA loan depends upon the lender. Both my husband and I needed a 640 to close. Luckily, we went through a home builder that offers credit repair and they were able to get my credit score from the high 500's to the high 600's and in some cases over 700. Also lenders look at the middle score and not the highest, so if her midscore is lower than required score then usually a lender will not move forward with the loan process. Also, make sure you do not have any credit accounts in dispute, this issue came up when my husband and I started the loan process.

Truthfully, coming to the forum helped me a lot when I was going through the home loan process, just make sure you do your research, because it seems like your loan offer will ask you for your whole life on paper, but all of the hardwork is worth it in the end. It maybe helpful to find a builder that is willing to pay your closing costs or offer downpayment assistance. Our builder paid all of our closing costs except for our down payment.

[EyesofTexas]

thanks for all the info. When should we begin the whole mortgage process. Our apartment lease ends in July.  From what I read it seems like it takes forever. 

[webhopper]

You may also want to check out Usda loans... you may be in line to receive their special financing offers...

Generally speaking you should give yourself 2 months... so I would say that you could get pre approved in mid April... that gibes you several weeks for finding the right house!

[MovingForward_2012]

Most pre qualified letters are good for 120 days so you could get pre qualified now and start looking and maybe put in an offer if it is a short sale. Those can take up to 6 mos to get the bank to accept the offer.

[MovingForward_2012]

But if you can keep working on your wife's credit score until they do the final soft pull, it will save you on interest. Make sure she pays her CCs down to 10% or so every month.