Newbie With A Question

[nodaysoff]

Hey everyone hows it going?

Im new on here, been lurking for a few days now. Currently looking to purchase a home and ran into a situation for the second time now so i decided to ask for help in understanding this process of whats been going on. So heres the story:

Back in December 2011 I applied and attained a pre-approval for 200,000 from lender 1@ EQ-584 EX-620 TU-574. I then started veiwing potential homes, but did not find one of interest within the 30days of my pre-approval. Fair enough. Januarary rolls through and towards the end of the month i spot a home I like, listed for 167,000. I then call lender 1 and ask for an updated preapproval(resubmitted docs) so i can put in an offer. He then calls back and says "Hey, you were denied. Seems like your score dropped, etc. maybe you can try another lender." Confused, and dissappointed i logged into my Experian account and called Equifax to check for new negatives and to find out whats going on, pretty much went detective. Turns out my scores did not change!!??

The next week i get intouch with lender 2, submitted documents and  just like that I WAS PRE-APPROVED@ EQ-584 EX-620 TU-574l. (offer submitted and rejected/beat by an investor with quick settle and cash, on to the next). Ok, so now were in mid Feb, looking at homes here and there, none of interest. March, nothing.

Last week (April 11) I find another home i like, listed @ 176,000. I go to check it out with the realtor, seems great. Call lender 2 since i knew I'd need a new pre approval to submit an offer. Resubmit all my documents again (stubs, W2, etc). Lender 2 calls back "Hey, It looks like you were denied for the loan" @ EQ-584 EX-677 TU-574.

*With both lenders i was going for a FHA loan

*The second time with the second lender my Experian score increased(Been paying bills) while EQ and TU didnt change

I know FHA requires 580 min, but its up to the banks descretion. right?

Im pretty sure if i go to another lender I'd probably get approved (based on trend)

Is my scores/report being pulled too much?

Am i asking for a preapproval too soon?

Why is my score getting by the first time around and not the second?

Sorry for the long post, will appreciate any feedback as I really want to know whats going on here.

[StartingOver10]

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@nodaysoff wrote:

@(post shortened)...Last week (April 11) I find another home i like, listed @ 176,000. I go to check it out with the realtor, seems great. Call lender 2 since i knew I'd need a new pre approval to submit an offer. Resubmit all my documents again (stubs, W2, etc). Lender 2 calls back "Hey, It looks like you were denied for the loan" @ EQ-584 EX-677 TU-574.

*With both lenders i was going for a FHA loan

*I know FHA requires 580 min, but its up to the banks discretion. right?

Im pretty sure if i go to another lender I'd probably get approved (based on trend)

Is my scores/report being pulled too much?

Am i asking for a preapproval too soon?

Why is my score getting by the first time around and not the second?

Sorry for the long post, will appreciate any feedback as I really want to know whats going on here.

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It is up to the banks discretion but FHA sets minimum standards under which they will insure the loan.

The absolute minimum mid-score that FHA will consider is 580.  Most lenders require a higher score, 620 or 640 being typical for the mid-score. The bank has to buy back bad loans so they are more cautious about originating a loan that will go bad quickly.

It sounds like you are going to mortgage brokers rather than getting your pre-approval through a mortgage banker or correspondent lender. You want to make sure the lender you use is the one that will actually fund your loan. That way when you have the pre-approval in hand you know you actually qualify for the loan. Many of the listings in our area require DU approval before they will accept your offer. If you are looking at bank owned homes, the listings require the buyer to provide credit scores too. If you show your mid-score of 584, your offer will not be accepted. You want to position yourself as a strong buyer that has the capacity to close.

IME, it would be better for you to take the time to increase your scores first so you can show you are a strong buyer. Read this section (mortgage) and the credit repair section to get an idea of what you need to do to get your mid score to at least 620. Of course, you can off set a lower score by having a much larger down payment. Discuss this with a good LO. It doesn't sound like you have found a good LO yet or he/she would have gone over the particulars of your situation. You may have to shop a bit to find one. Ask your Realtor for a good reference and be prepared to work on your credit in accordance with the lenders guidelines.

[nodaysoff]

I see..... Yeah indecided due to discouragement to wait while intry to increase my scores. First lender was vst financial, second was wells fargo. Thanks for the reply. I will take another shot in june/july

[boomhower]

With those scores it's going to be hard, very hard.  Getting a pre-approval is one thing.  Making it through underwritting is a whole different beast.  Have you tried working on your reports to get the scores up?  Just getting north of 600 would be a big help.  580 is the minimum FHA will accept but the vast majority of lenders will require much higher than that.

[nodaysoff]

Yeah i have. Im actually going to splurge and payoff all my delinquent accounts today and tommorrow. Although it wont do much since its not revolving. And credit scores change takes time. It will atleast give me a piece of mind. Thanks for the feedback

[BIRDWRITER]

Hi,

DO NOT PAY OFF your delinquents until you carefully read through the "rebuilding your credit" board. Post your delinquencies there, and ask for advice. Once you pay, you have no leverage. You can sometimes work with creditors to get them to delete the negatives, which will raise your score a whole lot faster than just letting stuff age off. When I started reading these boards a few years ago, my scores were all under 600. Now I'm edging toward 800! Knowledge is power. Let the great folks here help.

[nodaysoff]

Wow i just got off the phone with revenue. Was ready to pay but then thought "may i should ask about this on the forum first." great info. Heading over there now. Lol. Thank You!!