Mortgage Score Question

Anonymous · ‎08-02-2017

I am waiting for some disputes to clear on Transunion and Equifax before I pull my mortgage scores, but am curious if there is a general consensus on FICO scores vs. FICO mortgage scores. Are they generally pretty close or does it really depend on the file? I had one score pulled back in February (for some reason the other scores didn't come up?) at 505 and it was nowhere near my Vantage score, which was roughly 580. Unfortunately, I don't know what my FICO scores were at the time to compare them, but just in the last three months they have gone up significantly 508/571/596 on 4/28 and as of 7/27 they are 629/645/644. Since the mortgage score was pulled in February, I have completed student loan rehab (new, clean tradelines reporting and old ones deleted), paid off all buy two medical collections that I am currently in a payment plan on ( I think 3-4 were paid off and removed, but stupid PRA won't delete!!!!), drastically reduced my credit card utilitzation from 90%+ to 3% and have no missed payments in about 18 months. I am hoping that my scores come up nicely and I can get a mortgage approval in the next month or two. I really would like to qualify for a conventional loan, but would go FHA if that was my only option. If I put down more than 20%, do I still have to pay PMI on an FHA loan?

me12345 · ‎08-02-2017

Yes, an FHA loan will ALWAYS have Mortgage Insurance of .85% or .80% of the loan amount depending on whether you put more or less than 5% Down...

In addition, there is also a one time Upfront fee of 1.75% of the loan amount that can be financed into the loan as well....

Thanks,

VA & FHA down to 550...
Licensed Senior Mortgage Loan Officer in the states of Arizona & California
Specializing in VA, FHA, USDA & Conventional loans. My company is also licensed in 12 states, Arizona, Colorado, Nevada, California, Oregon, Washington, Utah,
Alaska, New Mexico, Texas, Illinois and Florida

Anonymous · ‎08-02-2017

My comments below in blue.

@Anonymous wrote:
I am waiting for some disputes to clear on Transunion and Equifax before I pull my mortgage scores, but am curious if there is a general consensus on FICO scores vs. FICO mortgage scores. Are they generally pretty close or does it really depend on the file?

It depends on the file.

Here is one of many examples that would cause extreme differences. Bob has five collections for amounts < $100 each. Bob has a FICO 8 credit score of 790. Bob's mortgage score on the same bureau might be in the mid-600s. That's because FICO 8 ignores collections under $100.

I had one score pulled back in February (for some reason the other scores didn't come up?) at 505 and it was nowhere near my Vantage score, which was roughly 580. Unfortunately, I don't know what my FICO scores were at the time to compare them, but just in the last three months they have gone up significantly 508/571/596 on 4/28 and as of 7/27 they are 629/645/644. Since the mortgage score was pulled in February, I have completed student loan rehab (new, clean tradelines reporting and old ones deleted), paid off all buy two medical collections that I am currently in a payment plan on ( I think 3-4 were paid off and removed, but stupid PRA won't delete!!!!), drastically reduced my credit card utilitzation from 90%+ to 3% and have no missed payments in about 18 months.

Good for you.

I am hoping that my scores come up nicely and I can get a mortgage approval in the next month or two.

That's likely to be an over optimistic timeline. You need to get all those changes to materialize in all three bureaus, including it sounds like some stubborn derog deletions. Then, after you confirm that the three credit reports look the way you want, you will need to pull your mortgage scores at myFICO. Then, after seeing what the scores are, you can develop a plan.

I encourage you to make sure you have some tools that enable you to pull all three credit reports for free and to do so frequently. That's important when lots of changes are being made to one's reports.

I really would like to qualify for a conventional loan, but would go FHA if that was my only option. If I put down more than 20%, do I still have to pay PMI on an FHA loan?

Anonymous · ‎08-02-2017

When my mortgage scores updated last month, at the time they came in around 10-15 points higher than my FICO8 scores.

Are you sure the old student loans have been deleted? If you have not ordered a new report, I would look into that especially if these were federal student loans. If you go to the Student Loan thread, you will see that it's common that the old tradelines are NOT deleted, they are just updated to paid. Federal school loans have a different reporting mandate, so their reporting is mandatory.

The good thing is you took care of the debt. You also reduced your credit card utilization drastically, which the mortgage scores really like to see. If your credit card utilization has updated on your reports, I would pull them here on myFICO to see where you are. When you pull your scores, it's a soft pull and no one will be able to see it nor will it have an effect on your credit.

Anonymous · ‎08-03-2017

CreditGuy: I have two collections on all three bureaus, both medical. One is down to $166 and will be paid off by the end of the month and the other is over $4,000 from a surgery. They are with the same CA, so once the smaller one is paid off, the payments will start being applied to the larger one. For the most part, I think the changes are done being made on my credit reports. I just need to wait for my re-disputes to be done, since Equifax said they deleted things, but they didn't...

Anonymous · ‎08-03-2017

Rookie08: Student loans are definitely deleted on TU and EX. The new tradelines date back to the opening of the federal loans. EQ has updated comments and in my dispute results it said that the payement history would be deleted, but it wasn't, so I am currently redisputing them. I have spent many, many hours reading threads on the Student Loan forum. A lot of it seems like the results vary based on who the servicer was.

Anonymous · ‎08-03-2017

@Anonymous wrote:
Rookie08: Student loans are definitely deleted on TU and EX. The new tradelines date back to the opening of the federal loans. EQ has updated comments and in my dispute results it said that the payement history would be deleted, but it wasn't, so I am currently redisputing them. I have spent many, many hours reading threads on the Student Loan forum. A lot of it seems like the results vary based on who the servicer was.

That's great that you were able to have that done. Before I rehabbed, I spent hours on the student loan forum as well. Don't forget that when you go for the mortgage approval you will need to have the dispute remarks removed from your credit report. That's a fast process, and they are usually removed within 72 hours. Not sure if it works out for every lender this way, but ours told us that the desktop underwriting will automatically issue a manual review if there are dispute remarks on your accounts.

Anonymous · ‎08-07-2017

I got impatient and pulled my mortgage scores today:

Equifax - 606

Transunion - 640

Experian - 603

I'm happy that I should be able to get an FHA approval, but wishing they were a little higher. I know Experian takes into consideration installment utilization and my student loans will have me forever screwed on that. I'm hoping my second round of disputes on Equifax will get the stuff deleted that the results of the last round said was deleted, but it seems like Equifax is having all sorts of problems lately, so who knows! I will have one of my three collections paid off by the end of the month (two medical), other one is paid but will not be deleted, so maybe that will give me a minor bump on the mortgage scores. Credit cards are in a good range, but I will pay them down a bit more this month, I think one of them was at 12% when it reported, but I am at 4% utilization overall. Ideally, I would have get a conventional mortgage, but I know my scores aren't there for it right now. I played witht the simulators a bit (I know that they aren't accurate, but I could get some pretty decent bumps with three more months of on time payment on my FICO 8 socres). I'm month to month on my current lease and have to pay two full months after I give them notice that I will be leaving, and I don't want to move during the WI winter.

Any more tips/suggestions on what I can do to get those scores up would be greatly appreciated!

Anonymous · ‎08-07-2017

@Anonymous wrote:
I got impatient and pulled my mortgage scores today:

Equifax - 606
Transunion - 640
Experian - 603

I'm happy that I should be able to get an FHA approval, but wishing they were a little higher. I know Experian takes into consideration installment utilization and my student loans will have me forever screwed on that. I'm hoping my second round of disputes on Equifax will get the stuff deleted that the results of the last round said was deleted, but it seems like Equifax is having all sorts of problems lately, so who knows! I will have one of my three collections paid off by the end of the month (two medical), other one is paid but will not be deleted, so maybe that will give me a minor bump on the mortgage scores. Credit cards are in a good range, but I will pay them down a bit more this month, I think one of them was at 12% when it reported, but I am at 4% utilization overall. Ideally, I would have get a conventional mortgage, but I know my scores aren't there for it right now. I played witht the simulators a bit (I know that they aren't accurate, but I could get some pretty decent bumps with three more months of on time payment on my FICO 8 socres). I'm month to month on my current lease and have to pay two full months after I give them notice that I will be leaving, and I don't want to move during the WI winter.

Any more tips/suggestions on what I can do to get those scores up would be greatly appreciated!

Is it the collections you are hoping to have deleted through the disputing process?

Are the collections updating every month to show non-payment?

What other derogatory factors are on your credit besides the high utilization and collections?

When we signed our contract in February 2017, I had EIGHT collections and TWO charge-offs. My starting and current mortgage scores are in my signature. My updated score includes a rehab of my student loans, two collections deleted, and 2 collections/2 charge-offs showing paid/settled with $0 balance. My last two collections will be removed from my credit report due to age in 8 days!

I've also had my husband add me as an AU on his credit card, and opened a secured card back in March. Doing this allowed me to raise my score tremendously.

Anonymous · ‎08-07-2017

One of the collections is a paid charge-off with PRA (aka never going to be deleted). The two medical I am paying $60/week on and will be deleted once paid off, one of them will be paid off and deleted by the end of the month. The ones that I am paying off are updating monthly, but I am making payments on them. I believe PRA has stopped reporting as a charge off monthly (can't look at my reports right now).

As far as other derogs, I have some 2 30-day lates on two different credit cards, one also has a 60 day late. They won't delete them. I had several loans that I took out and then were paid off as part of a debt consolidation, but in the meantime they went into a charge-off because I had to stop paying them. They are only on TU (ironically my highest mortgage score) but show no payment history just a negative account. I did a dispute to see if I can get those deleted since they aren't actually reporting any of the payment history that I did have (hopefully that doesn't back fire). Completed SL rehab, and am redisputing the EQ dispute. They said that they were deleting the payment history, but it is still there. If that ends up actually deleted, I would think that that would raise my EQ (current mid score) a bit. So I only owe money towards my two medical collections, student loans, and credit cards.

Student loans are 10 years old, so account age isn't an issue from me, but most of my credit cards are about 2 years old. I thought about asking my dad to add me as an AU on his cards, but I'm not sure if he would buy into it or not. I've also read that mortgage lenders are starting to ignore AU accounts because it doens't necessarily reflect on the borrower. I kind of think I just have to keep my cards low and play the waiting game. My collections became collections a year ago in September, not sure if that has any type of scoring break since they aren't as recent or not. Do they age and have less of an impact? There isn't anything close to falling off, except for some inquiries (I think six before the end of the year, but they aren't affecting my score anymore anyways).