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Trying to Understand How Your Credit Score Influences Underwriting

I'm trying to understand what things are focused upon and overlooked depending on your credit score in underwriting? Any information would be greatly appreciated.

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Re: Trying to Understand How Your Credit Score Influences Underwriting


trudawg660 wrote:

I'm trying to understand what things are focused upon and overlooked depending on your credit score in underwriting? Any information would be greatly appreciated.


Well it's the score yes, but it's really everything in your file. Most will agree getting to 640 will help you immensely, especially if you're going FHA. For conventional you probably want to get your scores even higher. You don't want any 30 day lates in the last year. Lower utilization is best. They'll just look at everything as a whole :smileywink:

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Re: Trying to Understand How Your Credit Score Influences Underwriting

Right now I have a 735 EQ it dropped from a 780 because of high utilization, right now I'm at 48% I will be back down to below 10% in a few months (deployment money) so I can imagine I will go back to the 780 range. Never had any late payments, no collections, and 1 inquiry on my report that will fall off before I try to get pre-approved. My oldest account shows 35 years but its an authorized user on my mothers store card I'm only 26, but it shows up like a normal account. 7 open credit cards 2 store cards and 5 major credit cards. Youngest was opened in July 2012 but I plan on applying in July 2013 so it will be a year old. I'm pretty sure I wont have any problems getting a loan but I over think things all the time.

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Re: Trying to Understand How Your Credit Score Influences Underwriting

You shouldnt have any problems qualifying.  Especially ifyou plan on using your va benefit.  Essentially, and this is really oversimplifying it, but if you have a score of 640 or so you can het a va loan with no money down.  Right now, generally anythingover 760 will get you the best rate possible.  However, with a va loan, you get the same low rate regardless of your score.  Is this future house near your current duty station?  That's one caveat with va loans.  You have to use it as your primary residence (or have a spouse live there). The occupancy requirement can only be satiafied by a spouse.  So if youre planning on buying a house back home to move into when you get out, that generally wont work with a va loan.  You also need to have more than a year left until your eaos to qualify.

 

btw, happy bday marine (a day late)!

Starting FICO 667 (5/2012) EQ
672 (7/2012) EQ. 681 (8/1/12) EQ
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Goal: 760+ but 700-720 by jan 2013
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Re: Trying to Understand How Your Credit Score Influences Underwriting


trudawg660 wrote:

Right now I have a 735 EQ it dropped from a 780 because of high utilization, right now I'm at 48% I will be back down to below 10% in a few months (deployment money) so I can imagine I will go back to the 780 range. Never had any late payments, no collections, and 1 inquiry on my report that will fall off before I try to get pre-approved. My oldest account shows 35 years but its an authorized user on my mothers store card I'm only 26, but it shows up like a normal account. 7 open credit cards 2 store cards and 5 major credit cards. Youngest was opened in July 2012 but I plan on applying in July 2013 so it will be a year old. I'm pretty sure I wont have any problems getting a loan but I over think things all the time.


I doubt you'll have any issues whatsoever .. hooah .. and thanks for your service. 

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

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Re: Trying to Understand How Your Credit Score Influences Underwriting

I have been doing a lot of reading in the VA Lenders Handbook. And I did notice that part about occupancy. I pulled this straight from the book.

 
Occupancy within a “reasonable time" means within 60 days after the loan closing.  More than 60 days may be considered reasonable if both of the following conditions are met:

 

  • ·   the veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing, and
  • ·   there is a particular future event that will make it possible for the veteran to personally occupy the property as his or her home on a specific future date.
  • Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA.

 

 right now I'm stationed overseas and I want to buy the house before I get back home. So I will break the 60 day mark but I should be okay though. I will be moving in within 12 months. I would love to avoid the 12 months of retainability rule. My current date of separation is in July 2014 as long as I apply and close the loan before July 2013 I SHOULDN'T have any problems.

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Re: Trying to Understand How Your Credit Score Influences Underwriting

There are two rules then that are possibly going to affect you. One is the occupancy rule, which you already pointed out is 60 days to 12 months after closing.  The other rule is that if you're one year or less out from your eaos, they won't use your AD income to qualify you for a loan.  Generally, service members don't have a job lined up 6+ months before they retire/get out, so if they're within 12 months of eaos, they have no income to qualiify.  However, since both rules are dealing with the 12 month mark, there may be a small window to work with.  

 

For instance, in your case you're getting out in July 2014. However, if you have a couple months of terminal leave, you could use that to buy the house about 14 months out from your EAOS, occupy it by the 12 month mark, and still have 14 months still on AD at the time you apply for/close on the house.

Starting FICO 667 (5/2012) EQ
672 (7/2012) EQ. 681 (8/1/12) EQ
Current FICO 682 (10/13/12) EQ; 718 (10/13/12) TU
Goal: 760+ but 700-720 by jan 2013
No new apps tll jul 2013
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Registered: ‎08-12-2007
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Re: Trying to Understand How Your Credit Score Influences Underwriting


Asailorshort wrote:

There are two rules then that are possibly going to affect you. One is the occupancy rule, which you already pointed out is 60 days to 12 months after closing.  The other rule is that if you're one year or less out from your eaos, they won't use your AD income to qualify you for a loan.  Generally, service members don't have a job lined up 6+ months before they retire/get out, so if they're within 12 months of eaos, they have no income to qualiify.  However, since both rules are dealing with the 12 month mark, there may be a small window to work with.  

 

For instance, in your case you're getting out in July 2014. However, if you have a couple months of terminal leave, you could use that to buy the house about 14 months out from your EAOS, occupy it by the 12 month mark, and still have 14 months still on AD at the time you apply for/close on the house.


thats basically my plan as of right now, my window is pretty small, but i plan on making it work. my UTI should be under 10% by April 2013 so i can apply and i have to close before July 2013. the money i make right now in England will make it really easy to get approved so i have to use that to my advantage.

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