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New Member
laitecia
Posts: 15
Registered: ‎09-22-2011
0

Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

I haven't posted on here much, but I have been following these boards for the past 3 years. It has helped me sooo much! Sorry, this may be a bit long and detailed!

 

Our home journey started 3 years ago, but was halted due to my husband's student loans going into default. We got into a 9 month repayment plan and then quickly got sold (thank God!) and his credit was getting back on the right track. We continued to save for a down payment and work on our credit. I then lost my job of 4 1/2 years and was 7 months pregnant. Major blow :smileysad: Luckily within a few months of having our daughter I was able to build up a little clientel on my own (I'm a web designer) and became self-employed. The first year I hardly made anything (deducted a lot and wasn't planning on buying a house for a couple more years), then the next year (last) I got a long term contract and was on the right track.

 

At the beginning of 2012, I decided to just try and see where we were for purchasing a home, I know I needed another solid year on my tax returns of the income I was currently making to be able to get the price of house we wanted (DTI). Low and behold I was told that we'd be able to qualify on my current income (not averaged over the past two years), our credit scores were decent 640+ and everything looked "ok". We also own another home (3 hours away) that we have rented out the past 3 years (b/c my husband got a job out of town), but I had only claimed it for one year. Still, it looked like we'd be okay. We were quoted at 3.85%, I was estatic! I turn in all of my docs and don't hear anything from the loan officer. It was driving me nuts! My realtor told me to shop around and I told the loan officer this and he got irate, really ugly and said he couldn't take my file if I was going to shop around on him.

 

I was frustrated but thought it would be easy to find another lender that would approve us. Wrong. We went through 3 more lenders, but they couldn't do anything for us :smileysad: They were averaging my self employed income over the last two years and it made our DTI sky high. I began to lose hope. I then tried ONE LAST TIME with our builder's preferred lender. It looked somewhat promising. Coincidentally, my husband's score dropped to 624 (my husband had increased his credit card balance couple months prior). My heart sunk, as one of our conditions was for his score to be 640+. Fine, we thought, we'll just pay it off and it should go up after the balance is $0 again. At the same time a new debt showed up (from '07) for $467. Here we go again. Ugh! Now his score was 598!!! This was a nighmare. We got the first one resolved but the debt collector would not take a PFD, so the best his score got was 608! :smileysad: This was NOT GOOD at all. We still went to underwriting, but got denied. It was awful, but our lender said they work with another direct lender and are more lenient and they said they could work with us. At this point I did not have any faith. Every day it was something new. It was very stressful, every single day.

 

More document and letters of explanation later, we were sent to underwriting and as of Wednesday we got the clear to close!!! I couldn't believe it and I still can't! Somehow they used my current income (last year and currently - I get the same amount deposited each month), so that made our DTI much lower. They also take 600+ credit scores for slightly higher rate. Our rate is 4.25%. We are still paying 3.5% down. Our house is new construction and we have our final walk through this afternoon! We close Wednesday at 1pm!

 

There is hope out there! I never realized how much WORK and PATIENCE this journey would take, but in the end it was all worth it!

 

Good luck to all of you!

Frequent Contributor
Sunshine85
Posts: 367
Registered: ‎01-14-2012
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

Great story that will be inspiring to others.

 

Enjoy your new home!

Frequent Contributor
Catacam
Posts: 491
Registered: ‎02-06-2012
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

Whooo hoooo!!!! Congratulations!!!!!

CLOSED ON OUR FIRST HOME MAY 30TH!!!


Starting Score: TU 589 EQ 526 EX603
Current Score: TU 635 EQ 603 EX ??
Goal Score: 750


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New Member
laitecia
Posts: 15
Registered: ‎09-22-2011
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

Thank you and I do hope it can be somewhat helpful/inspiring to others out there! I was there! It will happen when it's supposed to! *easier said than done, right?* :smileyhappy:

Moderator Emeritus
webhopper
Posts: 7,225
Registered: ‎09-16-2011
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!


laitecia wrote:

I haven't posted on here much, but I have been following these boards for the past 3 years. It has helped me sooo much! Sorry, this may be a bit long and detailed!

 

Our home journey started 3 years ago, but was halted due to my husband's student loans going into default. We got into a 9 month repayment plan and then quickly got sold (thank God!) and his credit was getting back on the right track. We continued to save for a down payment and work on our credit. I then lost my job of 4 1/2 years and was 7 months pregnant. Major blow :smileysad: Luckily within a few months of having our daughter I was able to build up a little clientel on my own (I'm a web designer) and became self-employed. The first year I hardly made anything (deducted a lot and wasn't planning on buying a house for a couple more years), then the next year (last) I got a long term contract and was on the right track.

 

At the beginning of 2012, I decided to just try and see where we were for purchasing a home, I know I needed another solid year on my tax returns of the income I was currently making to be able to get the price of house we wanted (DTI). Low and behold I was told that we'd be able to qualify on my current income (not averaged over the past two years), our credit scores were decent 640+ and everything looked "ok". We also own another home (3 hours away) that we have rented out the past 3 years (b/c my husband got a job out of town), but I had only claimed it for one year. Still, it looked like we'd be okay. We were quoted at 3.85%, I was estatic! I turn in all of my docs and don't hear anything from the loan officer. It was driving me nuts! My realtor told me to shop around and I told the loan officer this and he got irate, really ugly and said he couldn't take my file if I was going to shop around on him.

 

I was frustrated but thought it would be easy to find another lender that would approve us. Wrong. We went through 3 more lenders, but they couldn't do anything for us :smileysad: They were averaging my self employed income over the last two years and it made our DTI sky high. I began to lose hope. I then tried ONE LAST TIME with our builder's preferred lender. It looked somewhat promising. Coincidentally, my husband's score dropped to 624 (my husband had increased his credit card balance couple months prior). My heart sunk, as one of our conditions was for his score to be 640+. Fine, we thought, we'll just pay it off and it should go up after the balance is $0 again. At the same time a new debt showed up (from '07) for $467. Here we go again. Ugh! Now his score was 598!!! This was a nighmare. We got the first one resolved but the debt collector would not take a PFD, so the best his score got was 608! :smileysad: This was NOT GOOD at all. We still went to underwriting, but got denied. It was awful, but our lender said they work with another direct lender and are more lenient and they said they could work with us. At this point I did not have any faith. Every day it was something new. It was very stressful, every single day.

 

More document and letters of explanation later, we were sent to underwriting and as of Wednesday we got the clear to close!!! I couldn't believe it and I still can't! Somehow they used my current income (last year and currently - I get the same amount deposited each month), so that made our DTI much lower. They also take 600+ credit scores for slightly higher rate. Our rate is 4.25%. We are still paying 3.5% down. Our house is new construction and we have our final walk through this afternoon! We close Wednesday at 1pm!

 

There is hope out there! I never realized how much WORK and PATIENCE this journey would take, but in the end it was all worth it!

 

Good luck to all of you!


Congrats!!!   Considering that rates were sitting at 6.5% about 5 yrs ago, you're still getting a great rate... Way to go for hanging in there and getting that web designing business up and running.  What an inspiring story!


Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
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New Member
laitecia
Posts: 15
Registered: ‎09-22-2011
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

Yeah, that's what I keep telling myself! Very happy with the 4.25% :smileyhappy: Thank you! It feels so good to be on the up side of the rollercoaster ride :smileyhappy:

Frequent Contributor
UpmyscoreinFL
Posts: 293
Registered: ‎01-12-2012
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

Can you tell me what builder and lender you used? Congrats
Equifax my fico 629
Transunion my fico 669
Experian fako 663
Regular Contributor
K_J
Posts: 209
Registered: ‎01-31-2012
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

Congratulations, what a story. I really admire your persistence.


Starting Score: EQ: 532, EX: 569, TU: 621 (All lender pull 10/15/11)
Current Score: EQ: 660,lender pull 4/13, EX: 671 lender pull 4/13, TU: 691 lender pull (4/13)
Goal Score: 700


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Established Member
lisaf
Posts: 34
Registered: ‎02-06-2010
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

Thank you! Our home is built by Landon Homes and Prime Lending is the one who FINALLY approved us. We closed on the 25th!

Frequent Contributor
germaine47
Posts: 305
Registered: ‎07-05-2011
0

Re: Self-employed, Low Credit Scores, High DTI but we did it! LOAN APPROVED!

You deserve every happiness, Congratualtions!!!!!!

Fico September 2012; TU 681, EX 674, EQ 652
Fako October 2012: TU 706, EX 641,

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