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Want to start pre-approval process

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Anonymous
Not applicable

Want to start pre-approval process

Hello everyone.

 

I'm a lurker and this is my first post here. I'm wanting to start the pre-approval process and am looking for some advice.

 

This past year, I have being doing some credit repair. I was going to wait until later in the year to begin the mortgage process but since FHA rules go into effect for IBR payments on June 30th, I think the best move is to get myself a pre-approval and a case number. In addition, I'm paying $1200 in rent (I'm in NY Hudson Valley) and I think I may be able to pay less with a mortgage. The house is just too small for my family and in too much disrepair. We need our own space.

 

My credit is mostly student loans. I have 8 closed Sallie Mae tradelines with some lates from 2013. I consolidated the loans in 2014 with Navient and almost immediately put the consolidation loan into forebearance (loan is approximately $74,000). A few months ago while researching, I realized this would affect my DTI. I went into IBR in January and have been on time with each payment.

 

I have one private student loan charge off for approximately $7500.00. DOFD is April 2012. I have tried to negotiate payments with them and they will not respond. I've tried disputing it as well and it is always verfied. I think I will have to deal with this negative and still seek approval.

 

I have one open credit card with Capital One, limit of $500. 35% utlization. I have 3 closed (in 2009) credit card accounts that are paid in full with no lates. I have a closed (in 2009) Proper loan that was paid in full with no lates.

 

I have 3 open collections which total about $700.00 (two are medical, one is Verizon) which I have the means to pay, but I don't know if I should and see what happens during pre-approval. I have 2 closed and paid collections which were federal student loans.

 

My income is 45K a year.

 

I'm not sure what else to disclose here, but any advice you all can give me with pre-approval, including lenders, would be greatly appreciated.

 

Thanks in advance.

 

Message 1 of 8
7 REPLIES 7
Anonymous
Not applicable

Re: Want to start pre-approval process

What are your current mortgage scores? 

Message 2 of 8
RonM21
Valued Contributor

Re: Want to start pre-approval process

Welcome to the forum! Knowing your scores will help determine what steps make sense on what to do next.


Total CL: $321.7kUTL: 2%AAoA: 7.0yrsBaddies: 0Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping

BoA-55k | NFCU-45k | AMEX-42k | DISC-40.6k | PENFED-38.4k | LOWES-35k | ALLIANT-25k | CITI-15.7k | BARCLAYS-15k | CHASE-10k

Message 3 of 8
Anonymous
Not applicable

Re: Want to start pre-approval process

Thanks everyone!

 

I will purchase them later today when I get home from work and post.

Message 4 of 8
Anonymous
Not applicable

Re: Want to start pre-approval process

Okay I'm back finally.

 

My scores are:

 

EQ FICO Score 5 - 650

TU FICO Score 4 - 617

EX FICO Score 2 - 620

 

Thanks ahead!

Message 5 of 8
Curious0ne
New Contributor

Re: Want to start pre-approval process

Are you looking for FHA or Conventional? Middle score being 620 might be a little low some some banks. But I'm interested in seeing what the brain trust aound here has to add.

Message 6 of 8
Anonymous
Not applicable

Re: Want to start pre-approval process


@Anonymous wrote:

Hello everyone.

 

I'm a lurker and this is my first post here. I'm wanting to start the pre-approval process and am looking for some advice.

 

This past year, I have being doing some credit repair. I was going to wait until later in the year to begin the mortgage process but since FHA rules go into effect for IBR payments on June 30th, I think the best move is to get myself a pre-approval and a case number. In addition, I'm paying $1200 in rent (I'm in NY Hudson Valley) and I think I may be able to pay less with a mortgage. The house is just too small for my family and in too much disrepair. We need our own space.

 

My credit is mostly student loans. I have 8 closed Sallie Mae tradelines with some lates from 2013. I consolidated the loans in 2014 with Navient and almost immediately put the consolidation loan into forebearance (loan is approximately $74,000). A few months ago while researching, I realized this would affect my DTI. I went into IBR in January and have been on time with each payment.

 

I have one private student loan charge off for approximately $7500.00. DOFD is April 2012. I have tried to negotiate payments with them and they will not respond. I've tried disputing it as well and it is always verfied. I think I will have to deal with this negative and still seek approval.

 

I have one open credit card with Capital One, limit of $500. 35% utlization. I have 3 closed (in 2009) credit card accounts that are paid in full with no lates. I have a closed (in 2009) Proper loan that was paid in full with no lates.

 

I have 3 open collections which total about $700.00 (two are medical, one is Verizon) which I have the means to pay, but I don't know if I should and see what happens during pre-approval. I have 2 closed and paid collections which were federal student loans.

 

My income is 45K a year.

 

I'm not sure what else to disclose here, but any advice you all can give me with pre-approval, including lenders, would be greatly appreciated.

 

Thanks in advance.

 


What is your current IBR payment? If it is more than $0, you basically have three weeks to get pre-approved and get into contract. Otherwise you will be forced to use ~$740/mo as your student loan payment, which would only allow you to qualify for an $800-$900 PITI mortgage payment (if you have no other debts besides the one credit card and student loans).

 

There are plenty of lenders who can go down to 620 for FHA. You can also get the pre-approval started, pay off the small credit card balance, and the lender can do a rapid rescore if they think it will help get you to 640 (if that is even needed). If you are serious about buying a home, you should meet with a lender ASAP... like today if possible. I recommend using a direct mortgage lender and staying away from the big box banks. Good luck!

Message 7 of 8
Anonymous
Not applicable

Re: Want to start pre-approval process

Thanks everyone!

 

I am applying for an FHA. My IBR payment is $11.55 a month. And yes! That is why I am wanting to apply even with my scores being so low. My credit is pretty straightforward and not too many negatives... even though I would like more time to clean up and maybe add one more tradeline.

 

I am going to take a dive and find a few direct lenders to apply with. I will come back and share what happens.

 

 

Message 8 of 8
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