Mortgage Loans

[theRSVPgallery]

I am a newbie to the board, so I will try to keep it brief while providing all of the essentials.

My husband and  I are looking to buy a new build inventory home, thr anticipated closing date would be sometime in May. We have placed a contract on the home and paid an earnest deposit of $1k with an additional $6k due within 14 days.

We are working with the builder's lender to apply for a home loan. Through the desktop system we were approved however according to the  lender this could be a false positive.  I have 8 disputes on my credit report and my husband has 2 disputes.

Most of the disputes are old and paid with the exception of 2 collection accounts. One with Meade & Assoc. for approx $800.xx and the other with Midland for approx. $1800.

The accounts  have comments listed as "consumer disputes account"

With he new regulations,  I was informed that all disputes had to be removed or resolved. I contracted all of the creditors and was able to resolve most of them with he exception of the two collection accounts. I contacted TU and spoke with a Rep who stated there were no active disputes and credit score is an accurate depiction. I was advised there were two options 1. I could contact the creditor directly and ask them to remove the language (previously tried and failed) or 2.  They could open up an active dispute to remove the dispute. 

I spoke with my lender to advise of the options presented and he recommended a rapid rescore.  I wrote a letter for each of the trade accounts flagged by the desktop system, which was 4 of the 8 accounts and they will take my medial score with TU and  run a rapid rescore.

In anticipation of my credit score taking a hit,  I did pay all balances on open trade lines to below 15% in an attempt to offset the possible hit to my score.
Seriously worried about getting approved and if we are unable to secure financing will I be able to collect my earnest money back. 

My median score is 639.

Any suggestions would be appreciated.

[tooleman694]

I think your score might actually go up.

[Strutte2]

You should shop around for different loans and be upfront about your credit situation. You may end up paying a higher interest rate but that may be preferable to losing your earnest money.

[theRSVPgallery]

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tooleman694 wrote:
I think your score might actually go up.

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I sure hope so. The lender stated we should know something in 2-3 business days. If what the rep told me at TU was true,meaning no active disputes are shown and credit score is a true reflection of all accounts, the pay down on the open lines of credit should boost it.

Fingers crossed!

I will keep the board updated as to what the results are.

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[theRSVPgallery]

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Strutte2 wrote:
You should shop around for different loans and be upfront about your credit situation. You may end up paying a higher interest rate but that may be preferable to losing your earnest money.

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I think I will, only went with this lender as they work closely with the builder and was hopinmg for a quick turn around for a hard approval since I was working with limited time (14 days) before the $6k became due.

[tooleman694]

Did they also rescore the cards you paid.

[theRSVPgallery]

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tooleman694 wrote:
Did they also rescore the cards you paid.

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2 accounts are unpaid collections and the other 2 are paid accounts.  Only 4 accounts came into scope,  which I found really odd, considering there are 8 accounts total. These accounts date back to 2007-2009.

[tooleman694]

FYI disputed collections do not have an impact on your score. So the rescore on those will do nothing good or bad for the score.

[getmycreditright]

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tooleman694 wrote:
FYI disputed collections do not have an impact on your score. So the rescore on those will do nothing good or bad for the score.

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My wife has a two disputes on her report and right now, her median is 653. Are you saying that when her disputes are removed, her credit score will not be impacted?

[JM-AM]

Disputes being removed generally have more of a negative impact on scores. While it is possible your scores may increase, I would not count on it.

Several reasons why disputes cause a negative reaction.

It is a collection
It is a charge off
It has late payments

Those are the three most common.

When accounts are disputed for some reason (not always) they are taken out of consideration in your credit score. Perfect example when you first dispute you usually see a change in your score positively.

When you remove the disputes these negative accounts may now be considered in your credit profile. Which in turn usually lowers your scores.

It really is a case by case situation depending on other factors in ones credit profile. So YMMV.