Mortgage in six months?

[elleng81]

Hello - Just wanted to run my situation by the experts....

I plan on applying for a mortgage in September. Right now my scores are TU FICO 645 and EQ FICO 622. My negatives are a paid charge off from HFC that should fall off in April, four defaulted student loans, and 1-30 1-60 day late from Dec 2011/Jan 2012 on my car loan. I am currently five payments into the student loan rehabilitation (should be complete June)... which is why I figured applying in September would be ideal... it would give my student loans three months to get picked up and reporting (my other student loans that I rehabbed took only two months to report positively. I make 79k/year. My debt is a 300 car payment and 330 in student loan payments and approximately $125 in minimum credit card payments (but it is rare that I carry a balance on more than one card). I have 25k for a downpayment and I am looking at homes in the 250 range. Taxes and insurance would be about 4500/year.

Does anyone think my scores will rise high enough to get a mortgage after my student loan rehabilitation is complete?

Thanks!!!!

[JM-AM]

Your scores are not that far off as of now.

Some Lenders would be okay with your present scores. The defaulted student loans is where you run into issues. Once your student loans are rehabbed you become much more approvable.

Your scores most likely will not improve because of the rehabbed status. They will start to become more aged and hurt you less and less over time.

What I would do is spend time on the rebuilding boards since you have some time before you complete the rehabilitation, and look for other ways to increase your credit scores. Ideally you would want to be 640 or higher for your mid score.

The price range you are looking at to purchase is okay at the present time, but may change as rates have been increasing.