Well, I finally got my credit scores above 620, and visited the mortgage broker on Wednesday afternoon. She pulled the scores andthen submitted an application to what I understood to be FNMA for automated underwriting and it came back as approved without conditions. Does this sound right? Is that where she would send the application?
After this, she faxed the complete paper application to her preferred lender, and said that we need to wait 4 to 5 days for it to come back from manual underwriting. I have several really old collections (which are due to fall off from now through the end of the year), and she told me not to worry about these because they are mainly medical and thay they most likeley will overlook them given their age and the small amounts.
She did, hoever, ask me to submit a letter of expanation about what happened to get me in that position. I wrote a rather long, personal letter that detailed what happened to me and the lessons that I learned. I explained that I understand now that it is critical to live within one's means (and thus my application for a mortgage that is well under what my DTI would allow), that I learned to insure against tragedy (and thus my carrying long term disability insurance), and that I learned to be very careful with credit, particularly revolving credit and thus I have credit cards that have low limits that can be paid off at the end of every month. She liked the letter, and said that I was not too personal. Do you think that underwriters actually pay attention to these letters?
Finally, she said that she felt that the application would pass underwriting, but with conditions that I pay a few of the newer collections. If the underwriter says to pay these, it is OK, right? I explained in the letter that I had not paid these because I was advised not to because it would damage my credit score, but that I would be happy to pay them. Was this a bad move?
Please, any advice and/or words of encouragement are appreciated.
