I've been mostly hanging out in other forums here, trying work on my credit in anticipation of applying for a mortgage in spring 2014. I wanted to finish paying of a personal loan and try to get some baddies removed from my reports. However, there is a house for sale that is not only in the neighborhood I want to buy, but was just lowered into my target price range. They just dropped price $5000 down to $119,900
- Credit. Most recent score was 720 EX, 684 EQ (ouch). AAoA is 7 years even. I have 5% utilization currently with roughly $40k in available revolving credit. My history has 2 Paid Collections from a VA Overpayment from 5/2011, and 2 30 day lates, one in 3/2012 and one in 2011. I have between 1 and 7 inquiries depending on the CRA. I was trying to get the baddies removed and one of my GW letters inadvertnently resulted in DSNB/Macy's reporting the 30 day late as "disputed"
- Income. Roughly $58k.
- Source of income. Employment Salary. I also get monthly mileage but not sure if I am supposed to list that since it varies.
- Monthly debt payments. $300 car loan (owe $15k), $450 student loans (owe $180k), $250 personal loan (wanted to pay this off before applying, I owe $6k)
- Employment - Current job for 8 months, have been a practicing attorney since February 2011.
- Assets/Reserves. $1500.
- Property. single family house
- Occupancy. Primary residence
- Transaction Type. VA Mortgage
I would have liked a few more months to prepare, but this house has everything I'm looking for and is actually one the block I grew up on. I applied for mortagage through USAA a year ago and was denied. Back then my credit utilization was 50% with 2 cards 80% utilized. I've been working hard to fix things, but I"m not sure I've come far enough. If it's close, I'd be tempted to try because houses don't go for sale very often this street.
Not to judge, but that student loan balance is staggering. With no money down you're putting yourself into a $320,000 hole with $58,000 annual income. I would think an underwriter would be more curious about how $450/month will pay off such a large loan balance than your credit card utilization, which is marginal by comparison.
This much debt + emotional purchase = big trouble in my view.
Starting Score: 707 (Experian); 702 (Equifax); 740 (TransUnion)
@TnTNYC wrote:Not to judge, but that student loan balance is staggering. With no money down you're putting yourself into a $320,000 hole with $58,000 annual income. I would think an underwriter would be more curious about how $450/month will pay off such a large loan balance than your credit card utilization, which is marginal by comparison.
This much debt + emotional purchase = big trouble in my view.
Saw an article recently about student loan debt killing home ownership prospects and the cover photo was a young attorney in pretty much the same boat I am. Looks like my decision to go to law school may end up doing the same for me.
@navyox wrote:
@TnTNYC wrote:Not to judge, but that student loan balance is staggering. With no money down you're putting yourself into a $320,000 hole with $58,000 annual income. I would think an underwriter would be more curious about how $450/month will pay off such a large loan balance than your credit card utilization, which is marginal by comparison.
This much debt + emotional purchase = big trouble in my view.
Saw an article recently about student loan debt killing home ownership prospects and the cover photo was a young attorney in pretty much the same boat I am. Looks like my decision to go to law school may end up doing the same for me.
Check about getting into an Income Based Repayment program if you are eligible.
I also have a LARGE amount of student loan debt, but I am in an IBR program that is based off a % of your income.
From everyone I have talked to, it is the monthly DTI, which is based on the IBR monthly payment amount (and other monthly bills), NOT the TOTAL amount owed that is more important to the loan underwriters.
@DrMac210 wrote:
@navyox wrote:
@TnTNYC wrote:Not to judge, but that student loan balance is staggering. With no money down you're putting yourself into a $320,000 hole with $58,000 annual income. I would think an underwriter would be more curious about how $450/month will pay off such a large loan balance than your credit card utilization, which is marginal by comparison.
This much debt + emotional purchase = big trouble in my view.
Saw an article recently about student loan debt killing home ownership prospects and the cover photo was a young attorney in pretty much the same boat I am. Looks like my decision to go to law school may end up doing the same for me.
Check about getting into an Income Based Repayment program if you are eligible.
I also have a LARGE amount of student loan debt, but I am in an IBR program that is based off a % of your income.
From everyone I have talked to, it is the monthly DTI, which is based on the IBR monthly payment amount (and other monthly bills), NOT the TOTAL amount owed that is more important to the loan underwriters.
That's very encouraging. I actually am in the IBR currently, which is an absolute lifesaver. My montly payment on the standard plan was $1900 a month.
@navyox wrote:
@DrMac210 wrote:
@navyox wrote:
@TnTNYC wrote:Not to judge, but that student loan balance is staggering. With no money down you're putting yourself into a $320,000 hole with $58,000 annual income. I would think an underwriter would be more curious about how $450/month will pay off such a large loan balance than your credit card utilization, which is marginal by comparison.
This much debt + emotional purchase = big trouble in my view.
Saw an article recently about student loan debt killing home ownership prospects and the cover photo was a young attorney in pretty much the same boat I am. Looks like my decision to go to law school may end up doing the same for me.
Check about getting into an Income Based Repayment program if you are eligible.
I also have a LARGE amount of student loan debt, but I am in an IBR program that is based off a % of your income.
From everyone I have talked to, it is the monthly DTI, which is based on the IBR monthly payment amount (and other monthly bills), NOT the TOTAL amount owed that is more important to the loan underwriters.
That's very encouraging. I actually am in the IBR currently, which is an absolute lifesaver. My montly payment on the standard plan was $1900 a month.
Do a search in this forum for IBR and you will find many people in the same position.
I think at the beginning of the IBR program several years ago there was some initial confusion, but it seems everyone now says that as long as the IBR payment amount is on your credit report listed as the actual payment amount for the loans then that is what the banks will go by for DTI calculations.
EDIT: I should have realized with that low of a payment on $180k that you were already in the IBR program..............