Stumped 1st time buyer

[diveforfun97]

I am a (hopeful) 1st time home buyer.  I am a combat wounded veteran, so I am eligible for the VA.  I had a bunch of baddies on my CR, mostly from the time period of my deployment and hospitalization.  However, once I was released I immediately paid ALL of them off!  I have two open CC's that I used and pay off every month.  I have a 3 Util ratio.  No car payment. I took a secured loan, deposited the loan into a savings account with auto pay ;-).   My DF has added my as an AU on a 5 year card with a 0 balance and never late.  I have never been late on a rent payment. I am still below the 620 mark that the banks need for a VA loan.  I really do not know what more I can do to get approved for my home.  I have paid everything off, and I am trying the GW processes.  There has to be something I can do to get into the house I want, which is significantly below my pre-qualed amount.  I hope that on of you great mortgage guru's could help me achieve this dream. 

First:

I have a $63 paid Medical Collection that was PIF by a company called MedRev. 

Second:

Charge Account   Military Star

Status as of: Mar 2010

Date opened: May 2006

Date of last activity: Jan 2007

Date paid out: Jan 2007

Date Closed: Sep 2007

Acct Number: XXXXXXXX

Loan Type: Charge Acct

Credit Limit: 2500

Largest past due balance: 2748

Terms: Not reported

Account type: Revolving Acct

Account Holder: Individual Acct

Scheduled payment amount: Not reported

Descriptions: account closed due to transfer

Current Status:  Payment after CO/ collection

Third:

Other Acct   Pioneer Military Lending

Status as of: May 2010

Date opened: Jun 2008

Date of last activity: Nov 2009

Date paid out:  Not reported

Date Closed: Not reported

Acct Number:  XXX(then some numbers)

Loan Type: Unsecured

Credit Limit:   Not reported

Largest past due balance:  3537

Terms: 28 monthly

Account type: Installment Acct

Account Holder: Individual Acct

Scheduled payment amount: 168

Descriptions: Profit and loss writeoff

Current Status:  Charged off as bad debt (PIF just waiting for the CRA to update, did not do PFD,  learned that too late, sorry late comer to myfico….lesson learned)

Fourth:

Credit Card   HSBC

Status as of: Mar 2009

Date opened: Jan 2008

Date of last activity: Sep 2008

Date paid out: Sep 2008

Date Closed: Oct 2008

Acct Number: XXXXXXXX

Loan Type: Credit Card

Credit Limit:   0

Largest past due balance: 945

Terms: Not reported

Account type: Revolving Acct

Account Holder: Individual Acct

Scheduled payment amount: Not reported

Descriptions: dispute resolved- customer disagrees

Current Status:  Payment after CO/ collection

Fifth:

Student Loan Acct AES/NCT

Status as of: Aug 2009

Date opened: Sep 2004

Date of last activity: Aug 2009

Date paid out:  Aug 2009

Date Closed: Aug 2009

Acct Number: XXXXX(then some numbers)

Loan Type: Student Loan

Credit Limit: Not reported

Largest past due balance: 21787

Terms: 199 Monthly

Account type: Installment Acct

Account Holder: Primary borrower on acct

Scheduled payment amount:  0

Descriptions: Profit and loss writeoff

Current Status:  Charged off as bad debt

I have been paying as agreed for about a year, in fact just raised what I pay them monthly, but they said that this will not be updated until the whole acct if taken care of

Sixth:

Vehicle Loan Acct Santandar Consumer USA

Status as of: Feb 2010

Date opened: Mar 2008

Date of last activity: Feb 2010

Date paid out:  Not reported

Date Closed: Feb 2010

Acct Number: XXXXXX(some numbers)

Loan Type: Automobile

Credit Limit:  Not reported

Largest past due balance: 16902

Terms: 62 unspecified

Account type: Installment Acct

Account Holder: Individual Acct

Scheduled payment amount:  447

Descriptions: Closed

Current Status:  Paid or paying as agreed

The baddie on this is two 30 days late 9/08 and 11/09 (both when I was in the hospital)

Eighth:

Vehicle Loan Acct  ESL FCU

Status as of: Jan  2009

Date opened: Oct 2002

Date of last activity: Jan 2009

Date paid out:  Not reported

Date Closed: Jan 2009

Acct Number: XXXXX(some numbers)

Loan Type: Automobile

Credit Limit: Not reported

Largest past due balance: 19341

Terms: 72 monthly

Account type: Installment Acct

Account Holder: Individual Acct

Scheduled payment amount: 356

Descriptions: account closed by consumer

Current Status:  Paid or paying as agreed

Like a dummy I cosigned for a buddy, and he didn’t do so well. 30 days late 12 x’s, 60 days late 4 x’s, and 120 days late 2 times.  Last of the lates were in Mar of 07

Ninth:

Credit Acct   Time Financial

Status as of: Apr 2010

Date opened: Nov 2008

Date of last activity: Nov 2009

Date Closed:  Not reported

Acct Number: XX(then a few numbers)

Loan Type: Not reported

Largest past due balance: 454

Terms: Not reported

Account type: Installment

Account Holder: Individual

Scheduled payment amount: 69

Descriptions:  Consumer disputes-reinvestigation in progress

Collection

Current Status:  120+ days past due

I have PIF on this acct months ago, agreed to PFD over phone (again a pre-myfico mistake), however I paid this off in Mar and still has not updated. I called OC and they said that they have sent it to the CRA but to just wait.

I really appreciate any solid advice that you can give to help me reach my goals, and of course I will post with any success or failures that I have along the way.  Again many thanks!!!

[Anonymous]

Well I am not an expert....but i am currently going through a similar situation so I can give you some advice based on my experience. I just recently got my fico score up to 623 (i started in the mid 500s).

you will probably get a lot of negative feedback from the mortgage gurus on this board because of your low fico score, but what i can tell you is that there are lenders out there that will pre-qualify you for an FHA loan if you can get your score up to at least 580. Quicken loans has a fresh start program that allows you to monitor all three of your fico scores (which is very valuable because you can't purchase your experian fico anywhere) and they use rapid rescoring software to give you suggestions on how to improve your credit to get you qualified. I enrolled in their program and got my middle score above 620 in less than two weeks (it just happened to be lucky that the accounts I paid down reported about a week after i paid them). The program is about $300 but if you go with quicken for your loan you will get the money back.

I highly suggest getting your credit score up up to par before attempting to qualify for a mortgage. The last thing you want is to go through the whole process and not know if your loan will be approved in the end because of your borderline credit. I am speaking from experience. its not worth the stress. You have to spend so much time, money, and effort. Not to mention the emotional attachment of getting your hopes up just to have your dream crushed in the end. If I could do it all over, i would be waiting to apply for a loan until I had at least a 10% down payment, lots of reserve money, and a mid fico of 650 or above. but thats just my take on it based on my experience. By all means it could definately work out for you. i dont know about VA loans but you could definately get approved for FHA with minimum fico of 580. Most of the experts will tell you that with a low fico score you will need a really strong file regarding your DTI, downpayment, time on job, etc. Do your research, use the advice on this board, shop for your lenders, and ask lots and lots of questions. You will find the best solution for your situation.

Good luck!

[diveforfun97]

Well I called Quicken Loans and you were right they do FHA and VA mortgages with scores of 580 and DTI under 40%.  I should be above the score whenever some of my newer stuff cycles through the bureaus.  Has anyone had any experience with Quicken loans?  Or have any other advice?  Thanks!

[Anonymous]

im not sure if they told you this, but you also need 4 open tradelines that have a 100% positive history for 12 months. you will also need to show proof of on time rental payments or mortgage payments for the past 12 months. if you have all these qualifications you should be fine with quicken.

My experience with quicken has been positive. the representatives get back to you in a timely manner, and the Loan officers tell you the truth about your situation (meaning that they dont just say they think you will get approved if they aren't sure about it). My problem is that i ended up choosing a different lender (BofA) and now i have to wait for them to make a decision. I am actually hoping they reject me so that I can do my loan through quicken, BofA has been a complete nightmare. they are very unorganized, the loan processor doesn't get back to you in a timely manner, when you send in your documents they say they didn't receive them and you have to resend everything all over again, and they are sooooooo slow with processing everything. If you can meet quicken's requirements I would highly recommend going through them.

good luck and keep us posted.

[Anonymous]

I have no advice, I will hopefully, praying, be purchasing with in the year..............I just wanted to thank you for your service and sacrifice, hooah! And wish you much luck!

[diveforfun97]

Thank you!

[Anonymous]

My personal opinion, from past experiences and friends who have had it happen, talk to a bank who deals with servicemembers on a regular basis (USAA, NavyFed, Armed Forces Bank, etc), and go VA not FHA. The requirements for VA are a little more lax than those of FHA and it's more benefitial in the long run.

Simply explain the situation to the bank as to why the payments were missed, I brought in my service record & DD214 to show proof of deployment, war zone time and medical time that corresponded with the only lates I had on my CB. They were more than understanding of the situation and circumstances and basically overlooked the lates.

Just my .02

GL to ya and thank you for your service!

[diveforfun97]

Great thanks for the advice.