01-19-2013 04:09 AM
My current status is as follows. myfico says 700 transunion, equifax 669, Credit Sesame 675 and my wife is myfico 693 transunion, equifax 645, and credit sesame 683 as of today. We are teachers of 18 and 19 years with tenure, with masters degrees and make 133300 per year and pay 1800 in debt per month (around 15% DTI).
In 2009 we did not make nearly as much as we do now and had 10 different credit card accounts with high balances and were making our monthlies and that's it. We were both getting our masters at the time so monthly cash was very low as we were living paycheck to paycheck. I had to have surgery at the worst possible time and even though we were insured we couldn't pay for everything and fell behind on our credit card bills.
They all went to collections and I decided to try to settle all the debts for less than the total. I did account by account until finally settling the last two in June 2012 and November 2012. Since I have opened two new cards and have used them sparingly and payed them down to leave just a little and my scores have risen nearly 60 points for both transunion and equifax. We currently have a mortgage on another house that is a two hour drive away that we have been collecting rent on the last 3 years and been claiming the income on our credit report. Have a year left on a car loan.
My question is can we get approved by an underwriter with recent finishing of debt settlement? Equifax is reporting late on the account that was recently settled but the account had been closed for 3 years, will this effect my loan chances?
Thanks any response will help relieve our stress because we'd like to purchase in June and we will have $22000 saved by then with savings and IRA.
01-19-2013 04:12 AM - edited 01-19-2013 04:21 AM
Forgot to add
In addition we want to purchase in Illinois, not in the Chicago area, and looking in the 250000 to 300000 range. The house we currently have a mortgage on is worth less than the mortgage as the market has dropped in that area. It is now only worth 75000 but I owe $100000 due to refinance in 06
Thanks for any help
01-19-2013 10:33 AM
01-19-2013 10:49 AM - edited 01-19-2013 12:41 PM
Thank you for the reply. Actually we get 650 a month for rent which pays for the mortgage but i have a home improvement loan as well that is another 350. I would love to refinance. And yes the 133000 is combined income between the wife and I. So is it a problem with the home improvement loan? We make 11000 a month. Our total monthly debts including the mortgage on the rental house is 1800. I was hoping this would be ok.
01-19-2013 04:17 PM
01-19-2013 10:58 PM
You may have to wait depending on how the collections reported once you paid. YMMV
Speak to a LO or Broker and let them know upfront. Bring a copy of your reports and let them see it before they pull a new report. Only let them pull your credit report if they know for sure you will be approved. Personally I would choose a broker as the broker does not want to work for nothing and doesnt want to waste time on a loan not approvable.
Even if you have to wait til the end of the year, just stay on track and make all payments on time, dont open any other new tradelines unless you absolutely have to, while its not always a deal breaker opening a new tradeline, it just makes the process easier.
01-20-2013 10:40 AM