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Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

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Anonymous
Not applicable

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

Just to clarify, I never said that you HAD to have perfectly clean credit post BK, or that you HAD to have 24 months clean credit.

 

What I said was that given low FICO scores, low down payment (trying to do zero out of pocket DP), BK, recent lates, and low reserves (which the OP updates to show there were some reserves) there was slim chance of an approval.  The OP has or is in the process of paying all card down which will bump score and has 7200 in cash reserves.  That still makes it a tough sell but possible.

 

As far as the 24 months, my point was, given the initial "spot view" of the file we were given, and without a jump in FICO and/or reserves, most UW would want to see a very established clean credit file.  with lates post BK, the magical 12 months may not be enough.  Not to say yo would need exactly 24 months, but just a strong track record of in time payments that they can track.

Message Edited by mickie08 on 09-09-2009 08:38 AM
Message 21 of 44
rockymtngrl
Frequent Contributor

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

Do NOT pay a CA for a medical debt. Only pay the original creditor. I'm not sure if I can post it here so I will try to PM you with a link to get the correct HIPPA process to get that removed. Do not pay anything on that until you review the info.
Message 22 of 44
Anonymous
Not applicable

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

Mickie,

Do you think that because the lates were derived from my husbands unexpected 2mo job attached layoff and my 3yr old daughter's kidney surgery will make a difference if I do a letter of explanation?

Message 23 of 44
Anonymous
Not applicable

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

Rocky,

 

I will wait for the PM.  I dont want to pay the collections until the bank tells me that it is necessary for me to do so in order to close the home loan.  So I think I have some time. 

 

 Also, I just heard from the Real Estate Agent that is listing our current residence for sale post foreclosure.  He is saying that he thinks they are going to list at about 165k and that FreddieMac is also going to offer 3.5% closing assistance.  He also told me that with the 165k on a foreclosure, he thinks that an offer of 130k would be accepted by Freddie.  So now I am torn, stay here and buy this one or move on and buy something else????

Message 24 of 44
Anonymous
Not applicable

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

While those do sound like legitmate reasons, with the BK in the recent past, the reasons do not matter as much.  With lates post BK, I am fairly sure that to go FHA you would have to go through automated approval.  That being the case, the reasons will not matter.  If they get an approval, they will make you write letters of explanation and all that and a good reason looks good to an UW, but the bottom line is that the computerized underwriting system is going to have to give you an OK and that is only likely with very string compensating factors.  What is your expected DTI?.  You may stand a chance with the 7200 reserves, low DTI, and if paying off those card balances gets you to over the 620 mark.
Message 25 of 44
Anonymous
Not applicable

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

Bank says that DTI with 165k mortgage would only be 30%.  That was without the payoffs showing on CR.  I dont know if CC with a zero balance still calculate as the minimum payment?  But banker had said that we couldn't go over 43% DTI and the house we are looking at is under the 165k, so we will be at or under the 30% DTI.  Do you think that paying off the CC's will raise the scores that much?
Message 26 of 44
Anonymous
Not applicable

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

Can you tell me the difference between manual underwriting and automated underwriting?  Also how the different underwriting processes help or hurt us?
Message 27 of 44
Anonymous
Not applicable

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

AU (automated underwriting) is a computer based program that pretty much all FHA loans go through.  It will either say approved,  or refered (there may be a straight denial answer to but I think most LO's weed out the people before this...Again not sure on that).

 

If it says refered, you have to have the individual UW for the lender do all the underwriting on the file.

 

If you get an approval, the UW at your lender just needs to verify all the information and help with the process (apparisal, etc).

 

Certain situations (past BK or Foreclosure with recent lates, High DTI, etc) usually HAVE to be approved through the automated underwriting and can not be manuallly approved.  AU will approve these situations as long as you have some compensating factors such as good down payment/reserves, high FICO, and low DTI.

Message 28 of 44
Lel
Moderator Emeritus
Moved:

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

Message 29 of 44
Anonymous
Not applicable

Re: Wanting to prequalify for a mortgage and cant seem to get scores where they need to be

Mickie,

 

Someone had told me today that you can ask a lender to do a rapid rescore with the CRA's now that I have paid off my CC's.  They said to post on the mortgage forum and ask how to do it and what benefit it has.  Do you know anything about this?

Message 30 of 44
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