Hi all,
I just want to share our home buying journey to pay it forward. These forums are amazing. My loan officer actually complimented me on my ability to pre anticipate what he is going to need lol. These forums have helped me in so many ways. I learn something new every time I read a new experience, so I felt I should share ours too. It’s only fair 
Our timeline:
We are in Southern Cali, income $90K
Hubby’s scores: (Before disputes) EQ-652, TU-641, EX-584
(After disputes) EQ-652, TU-705, EX-594
My scores: EQ-679, TU-577, EX-629
Randomly submitted loan app for pre-approval- 6/30/13
Pre-approval letter $325k- 7/11/13
Credit disputes filed- 7/12/13
Saw our perfect house- 7/25/13
Submitted offer- 7/26/13
Offer accepted ($176k 3k towards closing costs)- 7/27/13
Open 21 day escrow and submitted all paperwork for loan- 7/29/13
Locked in our rate at 4.5%- 8/1/13
Home inspection- 8/2/13
Appraisal- 8/4/13
Loan sent to Underwriting- 8/5/13
Appraisal report back (9k over)- 8/6/13
Requested close date: 8/19/13
How it started: At the beginning of June we really didn’t believe that this was even possible. We actually weren’t even considering it. I recently graduated from college and we wanted to wait until we had 2 incomes before we thought about buying. One day in late June, my husband said we should just see if we qualify and what we should be working on so that we could be taking care of our baddies and working towards our home owning goals. I went to a random website…I think it might have been the FHA website…and filled something out. We started getting emails from lenders. I picked the first one that answered and filled out a loan app. He said he would have an answer in 48 hours and I kind of forgot about it for a week because I hadn’t heard back from him. Then I emailed him and he emailed me back with our preapproval letter for $325,000 FHA “diamond lane program” loan (which meant 21 day escrow) with 3.5% down! We thought that was crazy because there was no way we could afford a mortgage payment that high but were very happy that we qualified with our horrible credit past. We decided to start working on our credit since we did want to buy a house in 6 months to a year. I pulled our reports and disputed some of the old negative items.
Credit history: In 2006-2009ish our decent credit got pretty much crushed. I was a Realtor in a vacation home area. When the housing market crashed and people were losing their primary homes, it was even worse in the vacation home market and my substantial income pretty much went away overnight. On top of everything, we had also been very careless with money. We didn’t know how to budget. If we had it… we spent it. It was easy come, easy go. We had just spent most of our savings on our beautiful wedding before the crash so we did not have back up money. We were juggling our bills and couldn’t keep up. We ended up letting all of our credit cards (except one) go to collections. We stopped paying on a timeshare we had just bought. Our auto loans kept falling behind so they came and got my husband’s truck twice. We brought it back up current both times so we didn’t lose it but it was very scary times. In addition to all this, we owed over $30,000 to the IRS in back taxes!!
Credit rebuild: After all that we ended up moving to another area so I could go to college. My husband has had the same job for 28 years so he was still doing that. During this time, I slowly but surely learned how to budget and live within our means. The IRS was threatening us and even levied our bank account once, so we closed the account and changed banks. Luckily my husband started getting refunds that started being applied to our back taxes and his got paid off. I am down to owing only $550 now…whew! We started getting small credit cards and barely using them and our negative accounts were aging so our credit was growing. We both got new cars within a month of each other in late 2011 and our credit scores were 650-670ish at that time. I was pleased with that. So for the past 4 years we have had no lates and no new baddies. I need to get MY credit utilization down some but it was almost all from college costs. My card limits are small though so I could probably pay them all off for $2000. My husband’s utilization is low (9%). I am so on top of our finances that I budget our bills for about 4 months in advance. We could be better about saving but honestly that will be easy once I am working and we have more coming in. Its hard to save when you don’t have a lot of extra. Once I am working we will add an extra $60k a year and since my husbands salary covers the bills then mine will be extra for savings and breathing room
Our home buying process: Our plan was to move to the area that will be directly between my husbands work and my work. We wanted to rent a cheap house there and save for a down payment. Our current rent is $1400 and the house for rent was $875 so we could save $500 a month towards the down. We were on our way back from visiting family and wanted to see the house for rent and a couple for sale just to see what you got for your money in this area. Well we fell in love with one of the homes for sale for $176,000. Immaculate condition, 2300 sq ft, 2.25 acres, 8 yrs old…and gorgeous!! We didn’t think we had enough to go through with it at this time but ran the numbers and realized we were only about $3000 away. So we made an offer and included the seller paying $3000 towards our closing costs. It was accepted. Our house PITI payment will be a $105 less a month than our rent!
I have been completely open and honest about everything in our credit to our loan officer. He explains things very well and doesn’t blow smoke. I never shopped loans because I felt very comfortable with our LO and our rates and fees. Plus he is getting us an FHA loan in 21 days, which from what I understand is unheard of…we’ll see…so far so good (knock on wood). All of our agents are impressed so far and all want his info for referrals ha ha. It’s crazy to me that this wonderful loan officer just fell into our laps. I am very blessed to have that happen. I couldn’t find anything negative about him or the company and liked that they were direct lenders. Only time will tell if he lives up to it all. I have been very antsy and anxious through the process and he has been very patient with me.
I am so worried something in our credit history will make it all fall thru. I wanted to know if our pre-approval was flimsy and if they based it on soft pulls. He said we were approved with the automatic underwriting but that he also did a hard pull and went over it with a fine tooth comb. We ended up taking me off the loan so we could save .25% interest and I had the one open tax lien so I am sure that would’ve been a problem. I am worried about the disputes I did 2 weeks before I knew we were going to be purchasing now. I am also worried about that timeshare we stopped paying on back in August 2007. It still reports as open and a past due balance of $11k…strange? It says it is scheduled to go to a positive status in 2015. Its even figured into our DTI. I am not going to do anything about it now unless the LO tells me to, but I don’t even know what I should do about it after this is all said and done. Should I say something and take the chance of waking it back up, just stay quiet, or dispute it?
Currently we are expecting our conditional approval today! I’m excited and scared out of my mind. I have gotten up every day at 2:30-4:30am every day since this process began! I can’t wait to sleep!
Once all this is over I am very anxious to build our credit too.
Don't do anything credit related at this point unless it is under your loan officers direction. That means no disputes, no new credit, no contacting old creditors, etc. The disputes you submitted may end up being a problem IF your lender needs to repull credit. (If I read your post right you did that after the loan application.) Most credit pulls are good for a minimum of 60 days so they may not pull again. The only thing you should do credit wise at this time is to keep paying your bills on time until this is over.
I am really surprised that the loan officer did not have a problem with the $11,000 defaulted timeshare, or that automated underwriting didn't kick it out but I am no expert that's for sure. If there are any problems or derailments just work with your loan officer to fix them up or if need be just plan for what you need to do in the future to make your home ownership dreams a reality. Welcome to the forums and Good Luck.
Starting Score: 500'sNobody gets out of life without dying and it is the rare person who gets through a mortgage application and approval without conditions. Just relax and let them do their thing and respond when they ask for information. And remember to breathe in the meantime.
Thanks for your advice and encouragement! I will be able to breathe again once I see the conditions 
