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Wait to qualify or pull the trigger?

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dollar_bill
Regular Contributor

Wait to qualify or pull the trigger?

  1.  To start I qualify for a VA loan, and I was pre-approved last year (they pulled credit then requested docs, however my taxes weren't in order). Some things have changed on my credit recently compared to last year. I am considering either going for a mortgage OR simply buying some land / lot and sitting on it until my credit is better (not sure what the best choice is which is why i'm posting). 
  2. Credit.  Scores from myFICO:  EX - 748  EQ - 694  TU - 684(TU sucks for updating!) . 3 paid medical collections showing on EQ/TU from 09/12 reported to fall off in 2+ years (haven't GW anything as I don't want to risk ruining the EX score, $150, $175, $963 are the amounts).  3 new accounts in the last 90 days (CC'S). Closed 2 accounts (CCs closed by me). 3 checking accounts + 2 savings accounts with 3 banks/cu's. A lot of this activity is still in the process of reporting, it might be another month or two before all reports are updated. Total revolving is $55k and balance is 6k. I have 11 installment loans (student) with a total balance of 14k. 3-5 inquiries per report, two will fall of EQ in Dec.
  3.  I'm going to stop here. I'm just asking if any of this above criteria would prevent me from obtaining a VA loan now, say like next month? If I should wait, why not buy a lot or a few acres that way I can just build after my profile calms down? Or is it a better idea to hold off and just pay off all my debt? I figure i'm otherwise good to go if my credit is not going to scare a lender off.
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7 REPLIES 7
foofighter74
Established Contributor

Re: Wait to qualify or pull the trigger?

You say that a lot of your credit activity still has to be reported and that it may take some time before all your reports are up to date.  Obviously, everything that gets included in your credit report could impact your scores.  I suppose it's a good idea to make sure your credit scores are going to stay within the ranges you've posted here.  Closing credit card accounts can impact your average age of accounts...obviously the longer you've had the accounts, the better it is for your score.  In addition, you have to be sure all your inquiries are reported, and their impact on your scores has already happened.

 

Do you have any other collections or late payments within the last calendar year?

Message 2 of 8
DallasLoanGuy
Super Contributor

Re: Wait to qualify or pull the trigger?

i dont see anything there that makes me think you would have any trouble at all.

 

Retired Lender
Message 3 of 8
kimmiller112
Frequent Contributor

Re: Wait to qualify or pull the trigger?

I don't know anything about VA loans, but you are looking pretty good to me.  Your mid score is just over 700, but you said you are waiting for some things to update, so your scores may rise.  Your credit card utilization is just under 10%, which is good.  To optimize your score, you may want to consider making sure all but one credit card reports at 0 with the other one reporting under 10% (and perhaps you are doing that).  You mentioned opening 3 new accounts within the last 90 days.  Ideally, you don't want to have any new credit or inquiries for 6 months (but a letter of explaination for those new accounts should be fine).  Your overall number of inquiries are fine.

 

Really, the only thing left is DTI.  You didn't mention things like income or expenses like a car payment.  As long as you are under what you need to be for a VA loan, you are in good shape.

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Message 4 of 8
HoldingOntoHope
Valued Contributor

Re: Wait to qualify or pull the trigger?

If you are going VA then most of the lenders simply have a qualify or no qualify score which is normally way below where you are. I know with NFCU last year it was at 620 mid-score. The only other issue as mentioned above is DTI. And my math skills are not up to those calculations even if you provided all the numbers. In short you do not get a better rate with VA for higher scores.

Best financial advice I ever got: "Just imagine what an adult would do and do that."

Starting Score: 500's
Current Score: EQ 701 (FICO) TU 721 (FICO) EX 715 (Quizzle)
Goal Score: 760 ALL


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Message 5 of 8
dollar_bill
Regular Contributor

Re: Wait to qualify or pull the trigger?

Thank for the repies guys, I feel much better about my current profile.. I will probably make sure everything is updated ( all of my addresses, employment, etc.. was out of whack as well on equifax) before beginning. I will gather up all of the docments I need(still have the packet from last year it's a good cheat sheet) and get it ready to go so when they ask all i do is hit send!

 

To reply to some of the questions, I have no late pmt's or collections other than the 3 paid medicals which showed up as paid last  09/12. They never hit my credit reports until I paid ( I was served paperwork at work, I still get made fun of).  I think two fall off in 2015 and one in 2017. Like I said I want to GW, but didn't want to risk the EX score.

 

My debt payments on credit are around $600, I have an installment agreement on my taxes that makes the total this high. As I said before I had to get my taxes straight and it involved prior returns that were not filed. I'm current now, but I owe the feds around $6k. My income is $80k per year on the low side(bonuses and OT can increase this amt). Had the same job for 6 years so that is easy.

 

I will try to do as suggested and manipulate the card balance reporting so that only one card shows a balance? I never have understood why that looks better because it seems to me the total balance is the same regardless if it's on 5 cards or 1 card? 

Message 6 of 8
coterotie
Established Contributor

Re: Wait to qualify or pull the trigger?

Rates are in your favor right now.  Get started, you can always do some cleanup if necessary.

I had predicted 2.7 on the 10 before 3, we're there now.  I can't tell if we'll see 2.6 before we see 2.95.  You're within .125 of the lowest rates will be for the foreseeable future.

 

Message 7 of 8
foofighter74
Established Contributor

Re: Wait to qualify or pull the trigger?


@dollar_bill wrote:

I will try to do as suggested and manipulate the card balance reporting so that only one card shows a balance? I never have understood why that looks better because it seems to me the total balance is the same regardless if it's on 5 cards or 1 card? 


Well, to maximize your score, the idea is to use less than 10% of your total available credit for revolving accounts.  The actual percentage varies between everyone's specific credit file.  Technically, you could have, say, 9% spread between five cards, it's just easier to pay everything else off and leave it all on one card.

Message 8 of 8
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