Mortgage Loans

[Matisnew]

I've read many great topics on this already but I'm still a little confused. Monday morning my fiancée and I applied for a USDA direct loan. We are under there cap for money and all that. I think we have a pretty good chance except for one thing, my credit score is 600 and hers is a 652. She just started building her credit about a year ago. I on the other hand had a student credit card when I was 18, lost my job and used it for gas without thinking of the consequence. I had 2 thing go into collection the card and a school bill, but both were paid off about 10I months ago and are paid status in my report. Will this hinder us from getting the loan? We have an open line of credit that we have had for 1you year now with no late payments, and a secured credit card that we use for gas and pay off at the end of every month. She also has a sears card that she uses for 10-20 dollars a month and we pay it as soon as we get the bill. Will this help is get into a usda loan? They already ran our credit and started employment verifications. Are these good signs? Thanks for any help in advance!

[pizzadude]

I am moving this to mortgage loans, should get responses there...

[samy2576]

This is the kind of loan I may be getting as well. The bank I am using requires a 640 but that can vary depending on the lender I think. I was also not allowed to have any unpaid collections or lates within the last year.

They will run your credit before making any decisions to see if they can work with you.

[Matisnew]

Mine is direct not guaranteed.

[playboy]

I don't know if it'll hinder you. I submitted a application for a home a week ago today. We started looking at loan options and the loan officer said that I would qualify for USDA. The first thing your lender should have done was enter your info in the USDA's automatic underwriting system to see if you even qualify for the loan. That's what my lender did. I was approved based on USDA's system but that's the first step. Most banks will still send your file through manual underwriting when it's that time. Next thing you need to know what is the minimum score that the bank requires? If you look at USDA's website, I believe the minimum score they're looking for is 600 or 620. Again your bank may require something different. Most bank will go above what USDA requires. For example, in my situation USDA states that if the borrower has a 620 or higher credit score, he/she doesn't need to write a letter of explanation for past credit blemishes. Well, the lender I'm going through UAMC, required that I write a letter of explanation (thanks myfico for the various letter formats) for 9 charge-offs that occurred 7 years ago. My mid score is a 674. If the bank underwrote to USDA's specification I wouldn't have had to write the letter stating that my father fell ill and that I had to move back to take care of him. All of those charge-off/collections are paid but my loan officer scrutinized my report and asked why accounts where still showing as collections and I had to explain that they were paid and I had to get letters from the CA stating that and remove any disputes, which were removed. If you have a good loan officer, he/she will get you prepared before you go to underwriting by asking the hard questions and asking for tons of documentation and why did you do this and why did you do that. Those are the ones that typically work closely with the underwriters throughout the process. That'll go along ways towards answering any questions that the underwriter may have. You're just getting started in the process. Your loan officer should keep you abreast on the happenings. Don't be afraid to ask questions. After all, you're paying the mortgage. My file to went to underwriting on Thursday. I'm hoping to hear something by 1-18. Send good thoughts and prayers my way guys. I'll do the same for you guys. We're all in the same boat; made some mistakes and now we're trying to make good. If you have more questions you and PM me whatever they call it.

[MovingForward_2012]

Wow! Congrats! I didn't know myfico had letter formats! Thanks for the tip as I plan to start with those. I was unsure what format the underwriter wants the LOEs written in. Thanks so much!

[Matisnew]

Thanks for all the info but mine isn't through a bank. Its straight from usda, my lender is a usda agent. Not a guaranteed loan.

[Matisnew]

So today I checked my fiancée fico score, 664 on myfico. Mine was 600 equifax about a month ago. Experian I have a 634 as of today. I haven't found a transunion, I did do credit karma which I know is fako and it was 605. Maybe we will have better chances than I thought!

[MovingForward_2012]

Myfico will give you a TU score but you have to pay extra for it as it doesn't come with score watch.

[Matisnew]

Got a call from usda telling me they wanted us to come in tomorrow for an applicant interview and to make sure we brought our licenses. I hope this is a good sign. Family friend said that's when they were told how much they're approved for!!!