Qualify for a ML in 18 -24 mos.

[alienfico]

I am learning so much from the collective knowledge of this board.  

This board should be required reading for young adults sothat they can learn how to manage credit properly.  If I only knew then what I know now.....

I'm spending my time mostly downstairs in the rebuilding side of the house, but I have a couple of questions regarding ML. I am planning on purchasing something in the next 18 to 24 mos.

1.  Income:  Currently 72K, employed for the past 10 years.

2.  Retirement Savings:  Over 100K but mostly in retirement instruments (403b, 457K, 401K).

3.  Liquid Cash Savings:  $6,000

4.  Property/Loan Type:  FHA for a HUD GNND if I can find something in CA

5.  Credit:  I have two installment loans that I have been faithfully paying on - I requested a forebearance on my SLM not knowing that it would result in a negative mark

     so I'm in the process of asking them to remove it since I have been paying faithfull since the forebearance.  

6.  DTI ratio - This number might be increasing because I am going to increase my payment of my SLM to pay them off earlier.  Currently about 15%.

7.  No car loan

8.  One credit card

9.  Now for the bad part....my FICO score is 589...the fruit of my careless past, which is why I'm spending most of my time on the "rebuilding" side of the house.

My questions:  

1.  I  know that I will need to raise my FICO to at least 650, which is why I'm giving myself at least 18 mos to 2 years before I even attempt to go after getting prequalified for loan, or should I do it sooner than later  --- of course that is if a GNND property comes up.  

2.  Should I focus on paying off the SML $11K - or is paying off that TL a bad idea.  

3.  Should I open more TLs - let's say 1 more card a secured one and when score improves an unsecured one?

4.  Should I increase my liquid savings to $10,000?

I would love to hear your opinion.

Thanks! 

*** I just wanted to add that I have set up appointments for a pre-purchase housing counseling session through a CCCS agency that HUD recommends, and I'm going to do the 8 hour workshop through HUD to learn as much as I can about purchasing a HUD home, but most of all keeping it.  

[ShanetheMortgageMan]

Are you the same person as http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/THE-GOOD-THE-BAD-AND-THE-VERY-UGLY/m-p/328459... ? 

Information sounds very similar.

[alienfico]

Yes, I am Shane and thank you so very much for responding to my other thread downstairs.  After I created this message, I couldn't log back on as Alienficeo, so I created fico redemption...now I can't log on as that...LOL. Go figure.  The only thing I had left off of this one was my back alinony support issue.  I'm working with an attorney to resolve that issue.  I have a pre-purchasing counseling session with CCCS, I am looking forward to learning the most that I can about this process so that I can be very well informed and prepared for when I do purchase.  

In the meantime, I'm rebuilding.  

[ShanetheMortgageMan]

You are welcome.  With the back alimony, that will most likely need to be paid current.  Hopefully your attorney can work some magic.

Doing the pre-purchase counseling is a good idea, that can help an underwriter feel more comfortable.

A 650 score would be a good goal to have, most lenders here are OK with a 620 though.  Higher the better.

[alienfico]

You are welcome. With the back alimony, that will most likely need to be paid current. Hopefully your attorney can work some magic.

Doing the pre-purchase counseling is a good idea, that can help an underwriter feel more comfortable.

A 650 score would be a good goal to have, most lenders here are OK with a 620 though. Higher the better.

****************************************************************************************************************************

Shane, I agree.  However, on the alimony subject  - I am the recipient not the payor, and yes I wish HE would pay it all current....it could certainly help with the down payment...lol  

[alienfico]

Thanks again Shane.   I certainly agree with you on the back alimony.  I wish it would be paid current since I am the recipient and not the debtor.

[ShanetheMortgageMan]

Oh, well in that case it's not imperitive for the back amount to be paid in fulll, but I agree it'd certainly make your life easier.  Where in SoCal are you looking to buy?

[alienfico]

I plan on looking in the Los Angeles area, the lower valley or somewhere in the city.  

[ShanetheMortgageMan]

Well there are 8 homes listed under the GNND program in Los Angeles County now, from La Mirada to Santa Clarita to San Pedro, hopefully there will be more as you get closer to when you want to buy.  Hasn't ever been a whole lot though.

[alienfico]

Please explain this to me, then how does HUD post their GNND homes.  When you click on the GNND option, approximately 17 other states highlight and not CA.  However, when you look at the addendum tab, they have a GNND pkg revised as of 6-27-14....so my question is this, although it may seem apparent....but are the homes that are listed  also in the GNND program as well?   I spoke to a broker and was specifically told by that the avail properties have to list as lottery.  Are there exclusions to this?  I'm ***confuzzled** confused and puzzled.  Thanks!