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Obtaining a new mortgage

New Member

Obtaining a new mortgage

My husband is self employed, claiming $15,000 in annual income. I have substantial income of $51,000 before taxes. My husband has excellent credit. EQ 779/TU/770/EX768. He has over $20,000 in savings. My credit scores are (EQ509/TU617/EX620. I’m working on increasing my score with National Credit Care. I’m anticipating another score increase as my husband added me as authorized user on two of his old cc’s. Plus I only have two cc’s with low balances. It’s the collections from past medical bills I’m worried about. $1000 in savings. $10,000 in 401k. Then I have student loans that are deferred for another 6 month’s.
Here’s the Issue.
We’re on the market for a new house. We saw one for $235. But when I do the mortgage calculator it says we’re only “approved” for $165,000. They’re going to use my scores because my husband doesn’t have enough income. We’re waiting for my scores to increase. This is my first time on the forum and am looking for some insight on bettering our pre-approval chances for a higher amount. Just anything you can think of. Thank you. Have a great day!
Message 1 of 8
7 REPLIES
Frequent Contributor

Re: Obtaining a new mortgage


Flywithme41 wrote:
My husband is self employed, claiming $15,000 in annual income. I have substantial income of $51,000 before taxes. My husband has excellent credit. EQ 779/TU/770/EX768. He has over $20,000 in savings. My credit scores are (EQ509/TU617/EX620. I’m working on increasing my score with National Credit Care. I’m anticipating another score increase as my husband added me as authorized user on two of his old cc’s. Plus I only have two cc’s with low balances. It’s the collections from past medical bills I’m worried about. $1000 in savings. $10,000 in 401k. Then I have student loans that are deferred for another 6 month’s.
Here’s the Issue.
We’re on the market for a new house. We saw one for $235. But when I do the mortgage calculator it says we’re only “approved” for $165,000. They’re going to use my scores because my husband doesn’t have enough income. We’re waiting for my scores to increase. This is my first time on the forum and am looking for some insight on bettering our pre-approval chances for a higher amount. Just anything you can think of. Thank you. Have a great day!

Everyone has medical bills. You might be able to go FHA. What's the overall balance for all your student loans? What are the balances for the medical bills as well?

Mortgage Loan Officer in Greater Chicago area plus 47 states.
Message 2 of 8
Frequent Contributor

Re: Obtaining a new mortgage

Are these scores your FICO 8 scores or your Mortgage Scores (which you can only obtain through MyFico, 3B report) ?  Your mortgage scores can vary quite a bit from FICO 8 scores especially if you have any derogs, past late payments, charge offs, collections, judgments, etc. Lenders may differ but common to do a tri-merge report on your mortgage scores, they discard your highest and lowest of the 3 scores and use your "middle" score. 

 

If I'm not mistaken on a joint application, they will use the lower middle score of the two applicants. So is it really not counting your joint income together as your husband makes less, or is it really that your scores are lower?

 

If you have a pristine payment history on all open/closed credit cards, past closed accounts, installments included, then you can search at the toolbar at the top for collection agencies that hold your medical debts, some will do a pay for delete- meaning taking if off your bureaus. Have you checked how old some of these medical bills are, and when they are due to age off your bureau reports?

Starting Score: 2/23/2017 Score 8 EQ 651 TU 659 EX 679
Current Score:11/23/2017 Score 8 EQ 744 TU 743 EX 743
Mortgage Scores 11/23/2017 EQ 756 TU 771 EX 754
Goal Score: 760+ ATB FICO 8, Middle Mortgage Score 760
Message 3 of 8
New Member

Re: Obtaining a new mortgage

Thank you for responding KC009.

Since my last post, my credit scores have increased. EQ612/TU623/EX622. My husband has added me to two of his oldest credit cards and I have paid down the two credit cards that I own.  Yes, I am hoping to obtain an FHA loan especially because I personally do not have $40k in savings. My medical bills total out to about $540 and student loans which are now in deferment until February 2018, are around $40,000. That's because of prior forebearance and deferments, accrued interests.

Message 4 of 8
New Member

Re: Obtaining a new mortgage

Thank you for responding DollyLama.

Judging from what you are saying,  Should I purchase Fico8 Scores. My husband and I haven't gone through the pre-approval process yet. My medical bills began in 2014.   I am working  with a credit repair company who specializes in mortgages. A mortgage lender referrred me to National Credit Care and I'm doing everythig under their advisement. I kind of want to approach the medical bill and pay it in exchange for deletion but i was told that it can cause problems. (lowering my score, not deleting it). maybe that's what's hindering me?  Most of the things on their are old like a few late payments from 2012 and 2015.  

Message 5 of 8
Established Contributor

Re: Obtaining a new mortgage


Flywithme41 wrote:
My husband is self employed, claiming $15,000 in annual income. I have substantial income of $51,000 before taxes. My husband has excellent credit. EQ 779/TU/770/EX768. He has over $20,000 in savings. My credit scores are (EQ509/TU617/EX620. I’m working on increasing my score with National Credit Care. I’m anticipating another score increase as my husband added me as authorized user on two of his old cc’s. Plus I only have two cc’s with low balances. It’s the collections from past medical bills I’m worried about. $1000 in savings. $10,000 in 401k. Then I have student loans that are deferred for another 6 month’s.
Here’s the Issue.
We’re on the market for a new house. We saw one for $235. But when I do the mortgage calculator it says we’re only “approved” for $165,000. They’re going to use my scores because my husband doesn’t have enough income. We’re waiting for my scores to increase. This is my first time on the forum and am looking for some insight on bettering our pre-approval chances for a higher amount. Just anything you can think of. Thank you. Have a great day!

Hi Flywithme41,

 

In order to help you I would need to know the monthly payment for all of the debts on your credit report. For example, car loan, credit card minimum payments & student loans for both of you.

 

When you say that your husband claims $15,000 a year in income, do you mean that is what his adjusted gross income is after deductions or what he shows before deductions?

 

 

 

 

 

 

National Mortgage Banker.
VA Mortgage Expert.
Message 6 of 8
Contributor

Re: Obtaining a new mortgage

Sorry to diverge from your topic in this thread:

 

I have always theorized that student loans, being in forebearance and or deferred status are just a gi-normous anchor with respect to the affect they have on ones credit score when they are looking to buy a home.

 

I even speculate that folks should begin paying those student loans first--either in an IBR or whatever the regular amounts are set to be as I believe that assists in improving a consumer's scores.   

 

Can anyone confirm this?

 

I know that if you obtain an FHA, conventional loan with FNMA or FHLMC that you'll have different requirements for calculating student loan debt so be sure you understnand this concept.

__________________________________________________

Licensed NC Mortgage Loan Originator
Message 7 of 8
Moderator

Re: Obtaining a new mortgage


Flywithme41 wrote:

Thank you for responding DollyLama.

Judging from what you are saying,  Should I purchase Fico8 Scores. My husband and I haven't gone through the pre-approval process yet. My medical bills began in 2014.   I am working  with a credit repair company who specializes in mortgages. A mortgage lender referrred me to National Credit Care and I'm doing everythig under their advisement. I kind of want to approach the medical bill and pay it in exchange for deletion but i was told that it can cause problems. (lowering my score, not deleting it). maybe that's what's hindering me?  Most of the things on their are old like a few late payments from 2012 and 2015.  


FICO 8 scores are NOT used for mortgage qualification purposes at all.

 

It would be better if you purchase the full 3 B report that shows all of your scores and use the scores most commonly used for mortgages to see where you are now so you have a better idea.  There is no mathmatical relationship between FICO 8 scoring attributes and the scores used to determine your mortgage credit worthyness. That's why you  want to see your actual scores. Plus, its a soft pull. If you have a lender pull your scores it will be a hard pull. 

Message 8 of 8