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Member
Posts: 11
Registered: ‎10-09-2007
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Past Home Loan Inquiry and FICO Scores

Just about six months ago I applied for a condo loan but I didn't move forward with the purchase after the seller withheld information on special assessments . I am now beginning the process again and the loan inquiry is showing up as a hard inquiry on my current FICO reports. If I wait until this inquiry drops from my report (my understanding is that it only remains for 180 days), would I see an increase in my FICO score (all other things remaining constant with other factors that contribute to FICO)? Just trying to decide if it would be to my advantage to wait a few weeks before actually moving into another loan process.
Super Contributor
Posts: 8,362
Registered: ‎09-28-2007
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Re: Past Home Loan Inquiry and FICO Scores

It is possible you will get a FICO boost of a few points, how many other inquiries have you had in the past 180 days?  What are your FICO scores now?
Member
Posts: 11
Registered: ‎10-09-2007
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Re: Past Home Loan Inquiry and FICO Scores

There is only 1 inquiry in the last 180--the inquiry associated with the first loan (that wasn't executed). No other inquiries since that time. My sig other has a middle FICO of 691 (and I believe that 700 is some sort of magic number) . . . so I am wondering if having this inquiry drop will provide enough of a boost. My middle FICO is 743 but it seems that people are not interested with my middle FICO since mine is the higher of the two.
 
Where it becomes important is that we will need an 80 15 piggyback and we are being told that the 15 piggyback needs 700 or better (it didn't several months ago when we went through the process pre mortgage meltdown; but seems to be important now).
Super Contributor
Posts: 8,362
Registered: ‎09-28-2007
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Re: Past Home Loan Inquiry and FICO Scores

2nd mortgages usually take the middle score of the primary wage earner when qualifying, but yes the FICO requirement has gone up to 700 & even 720 with some 2nd mortgage lenders when going above 90% CLTV in the past few months.  9 points is a lot just to get by removing 1 (and the only) inquiry, it could be possible but I wouldn't put it in the likely category.  Are you going for a conforming loan amount (sales price)?  If you are, another way to avoid mortgage insurance is by opting to take LPMI (lender paid mortgage insurance) instead of BPMI (borrower paid mortgage insurance), there is a slightly increase to the interest rate in trade for the lender paying the mortgage insurance for you.
Member
Posts: 11
Registered: ‎10-09-2007
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Re: Past Home Loan Inquiry and FICO Scores

You indicate that 2nd mortgages usually take the middle score of the primary wage earner when qualifying.  My income is the primary (higher) income of the two, but I have been told by a mortgage broker that lenders always work from the middle score of the person who has the lower middle FICO (your point seems to be different than what we have been told). Is it possible that a different lender will work from my 743 as the primary wage earner (we are an unmarried couple if that matters).
 
Thanks.
 

Contributor
Posts: 101
Registered: ‎05-14-2007
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Re: Past Home Loan Inquiry and FICO Scores

Gemerally, lenders use the median score ( which is the middle score). However, the lender might be trying to get a higher intrest rate for the loan. Which means he is able to give the real estate broker a kick back on the loan. Pursue other lenders, talk to them on the phone just general conversation. In Mi, both of your scores are high enough to qualify for the loan with a low intrest rate. The piggyback might be causing some concern. If it is taking you above 90 percent loan value. Especially if you own another property.
Lenders are being very cautious these days. The foreclosure rate is very high througout the country and they are having to eat alot of loans. Just ask around You will get what you want.
As for the inquiries from the previous loan. Write the company explaining that situation. They may or may not, reconsider removing the inquiry. But it does not hurt to try. At the most they will say yes. But according to what I have read inquiries will have a very little toll on a persons score. Unless, ther are alot of them.
Valued Contributor
Posts: 2,385
Registered: ‎09-10-2007
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Re: Past Home Loan Inquiry and FICO Scores

I resent the kickback comment!
 
As a broker - I can NOT accept money (or any other favor) from a lender for throwing business their way - I would lose my license and end up in jail!
 
YES, we do have affiliated companies we work with - but these MUST be disclosed to the Buyer and Seller.  It is done here at the listing appointment or Buyer Interview.
 
Truthfully, I will refer buyers to people who have programs that suit their needs (affiliated or not)- and who follow-up, who close the loans on time, who keep in touch with me (preferably before they call the buyer with the news - because all the buyer hears is 'problem' - it could be the fax didn't go thru, but unless I know that before the buyer, I have a really upset buyer and no way to solve the problem until I know what the problem is).
 
If I feel they are not being given an appropriate program - I will tell them to talk with someone else.  I am their advocate in everything that has to do with either buying or selling that property.
Now a member of the UNOFFICIAL 700 Club - Plus scores of 734-734-747
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Member
Posts: 11
Registered: ‎10-09-2007
0

Re: Past Home Loan Inquiry and FICO Scores

So my mortgage broker says that she has only 2 lenders that she can work with (is she saying that she is only willing to work with lenders who are affiliates) and these lenders will only work from the lower middle FICO which is a disadvantage to us. From what you are saying it would seem that she should be scooting out lenders whose programs will advantage us (meaning those lenders who work from the higher earner's middle FICO). Thoughts?
Super Contributor
Posts: 8,362
Registered: ‎09-28-2007
0

Re: Past Home Loan Inquiry and FICO Scores

Well, not all mortgage brokers have access to the same wholesale lenders.  Each wholesale lender has an approval process where the broker of record completes a "broker approval package" which usually requires a credit check, a certain volume of loans to be done (usually based on past volume), and agreeing to the terms/conditions under where a broker would have to buy back a loan (in case of 1st payment default, or fraud).  It could be that your broker only has a few lenders who offer 2nd mortgages (many lenders are eliminating 2nd mortgages from their program offerings) or maybe they are only signed up/approved with a handful of wholesale lenders.  I don't think it's a matter of your broker not wanting to look around though, as all mortgage brokers know it's their job to find a loan program to accommodate their clients.  This is where shopping around might get you better terms on the mortgage.
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