Qualifying for a new mortgage

[Anonymous]

Hello, thanks in advance for any advice.. 

My husband and I would like to buy a house. We both had terrible credit and were bad with paying bills.  We started with Suze Orman's get out of debt plan, a few years ago, and have paid off all of our debt, with the exception of a car note. We have four credit cards that we pay on time every month and keep low balances on (do not want thousands of $$ of debt ever again).  We have over 100K in combined income, my credit scores are 610, 646 and 637 -- his is 611, 626 and 630.  We really need the extra space (kids getting big) -- it took us a few years to get our scores into the 600s. We have about 20% down (depending on the house price).  We are considering applying for an FHA but aren't sure if we would qualify.  Your thoughts?

[Anonymous]

Well, as long as the debt ratios are right on the house you want to buy, I don't see any reason for you to have trouble with FHA. Good luck to you!

[Anonymous]

FHA is not as score dependent as conventional loans. Although the lenders that you are using might have minimums which right now seem to be around 620. I understand that some will go to 580. They will use your middle scores and since you are married the lower of the two middle scores.  20% down will look good and as long as your debt ratios are good which it seems as though they are you should be fine. Keep in mind that FHA is for first time buyers, so if you have already bought a house in the recent past, you won't be eligible for FHA. You might want to see if you qualify for a USDA.

[rockymtngrl]

FHA is NOT for first time home buyers. Anyone can use it-you just can't have more than one FHA mortgage at a time.

[Anonymous]

thanks  for correcting me!

[WannaHouse]

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@Anonymous wrote:

Hello, thanks in advance for any advice.. 

My husband and I would like to buy a house. We both had terrible credit and were bad with paying bills.  We started with Suze Orman's get out of debt plan, a few years ago, and have paid off all of our debt, with the exception of a car note. We have four credit cards that we pay on time every month and keep low balances on (do not want thousands of $$ of debt ever again).  We have over 100K in combined income, my credit scores are 610, 646 and 637 -- his is 611, 626 and 630.  We really need the extra space (kids getting big) -- it took us a few years to get our scores into the 600s. We have about 20% down (depending on the house price).  We are considering applying for an FHA but aren't sure if we would qualify.  Your thoughts?

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I say go for it!! The only thing I see is the lowest mid is really close to the 620 that MOST lenders are wanting now. What are your CC's at? (utilization) It may help if a CC on DH's reports is paid down to about 5-9%. That might give him a bit more leverage on the score.

Everything looks good, just a precaution so it doesn't drop under 620. 

Congrats on your debt payoff!!! WooHoo