Need advice on first time mortgage and trade lines

[spliteye]

Hello,

I've been planning on purchasing a home for a while now. I've been saving and I have a down payment, possibly up to 20%. My middle score is 725, which the lender said was great and in my favor. I have a full time job that I've been employed at for a few years now.

The main issue that I'm having is the three trade lines. I have one credit card and one open account at a retail store. I had a personal loan before hand, however it's been closed for a year, so it no longer counts.

The lender states that they need three trade lines, I guess this is so they can make sure that I can properly pay my debts. I've been trying to figure out that third line. I'm living at home, so my rent is paid in cash to my family, so I don't see how that would count. The only thing that is in my name that is paid by the month is my auto insurance, which he said would count, assuming I can give them statements through the last 12 months. The issue here, is that my insurance company goes through computer issues (believe it or not) and ends up overcharging me, giving me the last few months without payment, because I've "paid ahead" , even though I'm on a 12 month installment program. I'm sure I can still get statements from them for all 12 months, however three or four may show no balance due.

I'm assuming this would essentially kill my deal? I've never been late on a payment, however they need to physically see this.

Does anyone have any advice on this?

If you need any more information, just let me know.

Thanks for any help,

Dan

[DallasLoanGuy]

will depend on your individual lender as to whether they will take that.

get all of the documentation you can and have the loan officer get it signed off by an underwriter/

[spliteye]

Thanks for the help.

[ezdriver]

---

@spliteye wrote:

Thanks for the help.

---

Some lender will accept alternative documentation to supplement a "thin credit" profile. Things like utility biils, etc.

If this lender will not accept alternative documentation with such an otherwise strong file, find another lender. Ask about their policy re alternative documentation before your apply.

Meanwhile take immediate steps to improve your credit profile. A couple of unsecured or secured credit cards and maybe a small secured installment loan are vehicles to get you to a more robust credit profile. There are hundereds of posts on this forum that address the credit rebuilding/strengthening challenge. Stay away from retail store credit cards. Underwriters know that retail stores use issuance of credit cards to buy business.

[ShanetheMortgageMan]

A lot of lenders are fine with whatever tradelines you have as long as you get an automated underwriting approval, that goes for both FHA & conventional.  However having 3 trade lines isn't an abnormal requirement to hear about.