Howdy! Welcome to the FICO Forums! 
@KG wrote:Hi there...
I've been reading these forums for a while. In short, I was very foolish with my credit when I was younger early 20s. Now, I am 34...work hard and its been slowly improving over a long period of time. I recently got engaged so my fiance and I would like to buy a condo (Boston area).
Congrats!!
We found a 2 bedroom condo we like that we're thinking of making a lowball offer on (about 10% less than the asking price). The condo is on the market for 470K but we think we can negotiate some on this price. The thing I'm concerned about is my credit and whether we'll find a mortgage with my scores. My fiance has excellent credit (over 720), makes $55K and has a good amount to put down 5-7% for a down payment. I make 95K/year, but my scores are 649 (EQ), 658 (EX) and 664 (TU).
My DH just got approved with a mid-score of 666 (creepy number)! You should be fine, score-wise!
Primarily, I'm worried about two things: my history of late payments (several from 2002-2003 including one 90 day late) and my credit scores. I've heard that in this market you shouldn't even bother applying if you're not 700 or higher.
Pfft. Who in the world told you that?
I think they're referring to getting the best rates. But, stuff like that can always be negotiated. At least, we were able to! So why not you?!
The biggest deal is RECENT lates. Lates from 2003 aren't recent. Heck, I can't even remember what hairstyle I had in '03!
The bottom line, though, is that if get approved via Automated Underwriting (sometimes you'll see it referred to as "AU" ), you're fine. With your scores, you should be.
I know its a generalization, but I'm curious if thats what others experiences have been. I have one collection item (an old medical bill for $188 - date assigned Sept. 2003) on two of my reports (not TU) and then my credit card utilization is high - about 85%. I can easily lower that since the balances are low (I have 2 credit cards with small limits). The only other financial loan I have is about $17K owed on my car loan (never late). I've been ontime with my bills for over two years now, but I just want to know with mortgages, what is realistic.
Thanks!
What are your combined income and the total of your bills (yours and his)? That will determine your Debt to Income Ratios. As long as your DtI says you can afford it, you should have no problem.
Do the math for your DtIs:
Add all of your debts (excluding utilities, and incidental expenses). That means CCs, installment loans, child care (can't remember if FHA counts child care or not). Now divide that number by your MONTHLY gross income. For the sake of the discussion, we'll say it's $12,500/month, okay?
We'll say that you and your fiance have $800 in bills and your MGI is $12500. Your "front-end ratio" would be .06%. FHA allows for 28%. Savvy?
Now, let's do your "back-end ratio": Let's say that your current rent is $2K. Add that to the debts we figured out above and divide that number by your MGI. $2800 divided by $12500 = .22%. FHA allows for 41% "back-end ratio."
(Though really, whatever the numbers are, it doesn't matter if you're approved via AU)
Now, let's see how much you'd be qualified for: $150K income, assuming $800 in debt (debt is your MINIMUM monthly payment -- if you have small CC limits, BO-NUS!). You **should** be able to qualify for roughly (according to Bankrate's "How much can I borrow" calculator) $512K.
Hope that helps!!
Thank you -everyone- for the terrific advice and feedback. I'm going to call the listing agent today to find out more information. While it appears the condo would qualify for FHA financing on its, I can't seem to find in on the listing of FHA approved condos list.
The condo itself is in the city so it is city/town water and sewer. There are four units in the building and there is a monthly condo fee, but it is nominal and includes all exterior landscape, maintenance, sewer water and electric.
Our debt to income ratio is really good. And I just paid off one credit card this AM so its just a few hundred dollars till the other is also paid off (or at 9% I'm thinking). Fingers crossed that we don't have to pull our credit just yet as it would be ideal if we can wait till those cc #s get updated on all three reports! I'm not sure how far along in the process you go before you pull the numbers.
The good news is that we have a real estate attorney in the family and a mortgage lender so I hope our advice team is ready for all our questions!
Thanks again...