Hello,
I have been reading these forums for awhile, thought it was time to register. My husband and I finally have a large enough down payment for a home of around $160-170K if we can get approved for an FHA loan. My history is as follows:
-Currently, my FICO score is 640 provided by my credit union each month for free.
-My husband's FICO is well over 700 (Equifax website is reporting 717, but I heard that it isn't the true FICO?).
-On my credit report is a repossesion of my car in 4/2006 with a charge off amount of about $3113.
-Capital One card charge off of $2993 from 3/2008, date of last payment 7/2007 (showing a balance of $4942 as of now).
-One credit union visa card (unsecured) that we have diligently paid on time each month. Currently the balance sits below $20 with a credit limit of $500. As we have charged a few things each month, and then paid it off, I have watched my score increase from 610 to 640 in just a few months.
-Chapter 7 Bankruptcy (only me from a previous divorce) filed 12/2002, discharged 4/2003.
-Student loans by both my husband and I in deferrment for another 11 months for me and over 12 months for him.
-A car loan by Chase bank only on my husband's credit that we took out last August because our old car was totaled.
-I have been on my job for over a year, with a layoff for 11 months in 2010. I have been doing the same job (accounting) for several years prior to my layoff and still in accounting. My husband also remained constant in his same industry for years as well.
My credit union told me they accept the middle score of the lowest applicant for applying for a home, and the FICO score they provide to me is from Equifax which tends to be the lowest of the three scores. So, although I have the minimum score to possibly qualify us for a home loan, my questions are:
How will the charge offs possibly affect our chance of getting approved? I have read it is not wise to pay these off prior to applying for a home loan. It would also wipe out our down payment if we did so.
How will the deferred student loans affect how much we can qualify for if we can get the approval?
With the challenges on my credit, is it better to go with a 'big bank', or should I use my credit union? Do credit unions offer more forgiveness and flexibility considering our situation?
We want to apply next month (mid February), but it would be nice to get some feedback from those with more knowledge of the industry before I get too excited. Both my husband and I have never lived in a home of our own (we are almost 40), and it sure would be our dream to own one soon. Thank you for any advice!
