Qualifying for a FHA Mortgage

[Anonymous]

Hi,

Hoping that someone on the board can shed some personal experiance or have knowledge with qualifing for an FHA Mortgage. I was told by a realestate agent that I need to have a fico score of 620 to qualify. I amj doing everything I can to raise my credit score that is in the mid 550 range. I have hired Lexington Law a few months ago, paying a Chase collection account that has a balance of $2,000.00 and dealing with three business tax liens totaling $3,000 by paying set payments each month. Would anyone know how many points my credit score will increase once the tax liens are paid in full? I also sent approximetly 8 letters requesting inquires from last August 2013 when I went for a car loan. Is there anything else I can do to move this along quicker so that I qualify from a FICO standpoint. I have the credit history, the financials and my utilization % is low. I do not have any open secured or unsecured credit cards and reluctant to apply with the fear of being rejected. I do have a mortgage on a house that will be sold by January 2015 due to a divorce and the house will sell for about $220,00 with a balance of $63,000. I also have a truck payment with Wells Fargo with a payoff of $11,000.

Any suggestions or comments I would appreciate.

Thanks, 

[ezdriver]

My opinion is that you should have at least 12 months of positive payments on three to four tradelines and almost no baddies on your credit report, along with a minimum middle score [lender pulled] in the mid 600s. A score under 640 will require a manual underwrite which will limit the lenders that you can use since not all lenders have inhouse manual underwriting capabilities.

[ShanetheMortgageMan]

Scores won't change after the tax liens are paid, the damage is done when it reports to credit as it's a public record.  There is no "updating" of the account when it comes to impacting scores.

620 is a good goal to get your scores up to, as a minimum.  Scores under 640 aren't an automatic manual underwrite though, it's still possible to get an automated underwriting approval with sub-640 scores (automated underwriting approval makes the underwriting process easier on you).  Looks like you'll have plenty of funds for the down payment as soon as your home sells.

The Rebuilding Your Credit section will have a lot more people giving you tips on how to improve your scores as quickly as possible.

At least 60 days prior to applying, stop working with Lexington Law.  You may even want to consider it now.  Pretty much all they do is dispute items, which you can just do yourself.  Depending on what accounts they are disputing, it may become an obstacle to obtaining an FHA approval as well.  See http://ficoforums.myfico.com/t5/Mortgage-Loans/FHA-changing-collection-account-judgments-amp-dispute...