I'm hoping that someone can help me answer some questions about getting a mortgage. DH and I have owned two homes previously, so I've been through the process but our situation has changed since last time we applied for a mortgage.
Currently our combined gross income is $150,00. My scores are EQ703 TU714, DH's scores are EQ596 TU614. DH's scores were much higher until a couple years ago when we ran into financial difficulty due to the fact that we had to move out of state for me to finish school. We were paying mortgage and rent at the same time and had considerable debt due to the fact that I was in school full time and we have 3 kids. No excuses here, just trying to paint an overall picture for you.
We both have 2 - 30 day lates (8/07 & 9/07) and a 60 day late(2/08) on our previous mortgage. DH has 3 cc's that were CO and 2 have been settled. The only reason we haven't settled the other one yet is because for some reason it is reporting that we are paying as agreed, in return giving him all those pretty green 30 day marks on that account, and I don't want it to update if we pay it and cause his already crummy score to drop more. If we get a mortgage, and yes I know it's a big if, we will happily pay the CO at closing.
I also have some late payments on a couple cc's from 2007. My Chase which was closed has a 30 (1/08), 60 (8/07), 90 (9/07), 120 (10/07) lates, I've tried numerous times to GW but they are ruthless. The other is my BofA that was also closed, I got them to delete my 60 and 90 late but they never notified the CRA's and I'm not sure what to do about that because I don't want the dispute to count against me. I do have a letter from them saying they will delete it. Other than that my report is clean. CC utilization is up to 50% right now but I'll be getting that back down to about 9% this month.
Our DTI with rent of $2000 a month is about 22%. We found a house we love. It's $430K and FHA limit is $373K. We only have 30K to put down. So do I have any other options? We do not qualify for USDA because we make too much. I'm hoping to get DH's middle score up to atleast 620 by the time we apply if not than I guess it's pretty much a no go, right? Even though my score is higher? If anyone can explain how applying jointly with a bad score and a good score works I would appreciate it. My gross is about $6300 a month so I don't think I could qualify on my own. DH had never had a credit problem before so it's been very discouraging for both of us.
I'm bummed because it's the only decent house we can find in the right school district and close to my work. Two very big factors in house hunting. We are being forced out of our current home because our landlord is being foreclosed on or we would be waiting another year to even look. There are no rentals in the area that would work either so I'm sort of at a loss right now...
Thanks in advance for any help.
Starting Score: EQ-686 TU 703