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Valued Member
izoid
Posts: 38
Registered: ‎05-01-2008
0

Should I Wait---FHA Loan

My wife and I moved to Georgia 7 months ago and are interested in buying new construction.  I work full time and make quoote a bit more income than I did last year so 2 years of tax returns do not reflect my current income.  My wife just re-entered the workforce for the 1st time in 14 years this month.  If qualification is based on our current (today's) income we are well below the 41% max for the loan we are looking for.  We will need Ameridream help to cover the 3% down for an FHA loan.
 
My credit score is low, 586, due to a collection account that was placed in 12/07.  The collection was paid this month and the CA has agreed to delete when they report next.  My wife has a 704 fico.  I tink mine is lower because of the collection and high utilization.  We will be able to pay our CC's down to approx. 10% over the next 12 months which should bring my score up considerably.  Neither of us have any other derogatory info except the one ca that is being deleted.
 
Are we better advised to wait for 8 to 12 months to apply for an FHA loan or would we be able to get approved at this point?  We are in a lease so waiting is alright if we will get substantially better rates but the builder is willing to buy us out of our lease if we could buy now.  I really do not know if we could be approved with our scores and my wife's very short employment history.  Any suggestions are greatly appreciated!
Valued Contributor
slyhouse08
Posts: 2,340
Registered: ‎04-08-2008
0

Re: Should I Wait---FHA Loan

I too had a collection from 12/07...and I recently paid for delete...if they sent you a letter regarding the deletion...you can go ahead with the loan process...and give them that letter...so they can do a rapid re-score...when my colletion came off I got a 45+ increase on all scores...so I think you should be fine...look on your CC statements...and find out the closing date...which is the date they report to the CRA...try to pay down some more on you CC's so you can get that UTL down...I think you should be good...
Valued Member
izoid
Posts: 38
Registered: ‎05-01-2008
0

Re: Should I Wait---FHA Loan

I also have eligibility for a VA loan.  I am disabled so they waive the funding fee.  Would this be a better option?
Frequent Contributor
caliborne
Posts: 263
Registered: ‎03-27-2008
0

Re: Should I Wait---FHA Loan

I dont' know about the income being considered

But a VA loan won't require any money down nor will you have to have PMI which will save you if you don't have 20% down.

I'm sure one of the mortgage guys will be on to give you good advice in the next day or so!

Good luck :smileyhappy:
FICO 6/2/08 , EX 754, 5/2 TU 720 EQ 722
Super Contributor
ShanetheMortgageMan
Posts: 8,046
Registered: ‎09-28-2007
0

Re: Should I Wait---FHA Loan



izoid wrote:
I also have eligibility for a VA loan.  I am disabled so they waive the funding fee.  Would this be a better option?


Yes that would be your best option since it'd have no mortgage insurance and no funding fee.

The income that would be considered is your current base income (salary or hourly) + any overtime/bonuses/commissions (which is averaged over the past 2 years).
 
You can go for the rapid rescore process the above poster mentioned, or just wait until the collection agency sends in their update to the credit bureaus and then go for qualifying at that point.

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