07-07-2011 12:24 PM - edited 07-07-2011 12:52 PM
today I read an article that said Wells Fargo had lowered its minimun FICO score to 500 for an FHA mortgage.
My husband and I have been working on increasing our scores since january, and Myfico has gone from around 540 to 600. My husbands Myfico has gone from 560 to 616.
Our gross income is at $5600 excluding my husbands bonus every month. We have been told that once my husband is at his job for 2 years that we can include his bonus, which will be april 2012. We dont really need it though because our DTI is really good, and we dont want to take a mortgage for the highest amount we can, we want to stay around $150k or under.
Our only debts are a truck payment for $345, I have an Orchard bank card that I keep a VERY low balance on (less than $10) my credit limit is $320. My husband has an Orchard bank card that usually has a $100 balance. His credit limit is $300. My husband also has a Tool repo on his CR for $3100. this is an outstanding balance that needs to be paid.
My question is....Does anyone know which CRA fico score they use? Or do they do a median score from all 3? Will my husband have to have his tool repo all the way paid off before getting a preapproval letter, or can he just prove that he has set up a payment plan?
We qualify and have taken classes for MSHDA downpayment assistance of $7500. But you HAVE to have a score of 600 to be able to use the down payment assistance. If its under 600 you have to have 5-10% purchase price for down payment not from a gift or downpayment assistance. Im worried if they use another score that ours wont be 600+..
TIA for any advice
07-07-2011 02:19 PM
I've been working with a Well's Fargo Mortgage Agent for about 2 weeks now, they used the Median score for all 3 CRAs, mine were 616, 622, 628, they used the 622, he did tell me they cut off was 620, this was on Tuesday. My Fiance's Score is a 768. We are getting a FHA Loan 30 year fixed, we're locked at 4.625% right now.
I have a BofA Collection of $4,460 from 2004, we still got the Pre-Approval Letter without having to pay the collection. In fact he is moving us through underwriting tomorrow, he says it could come back saying I need to pay the collection off. If that happens we are going to run the loan on just my Fiance's name and hope for the best. I'll report back when i get through underwriting on whether i needed to pay off the collection or not.
07-07-2011 02:41 PM
I wouldn't get my hopes up with Wells Fargo, they lowered their standards in name only . I would try at least one more company in case you get denied by their underwriting
07-07-2011 04:29 PM
..me too! if they are just saying it to look good then thats really stupid. I am currently working with PNC and they need 620. we are close, but close doesnt cut it and I was hoping to be able to go through wells fargo if possible to get into a house before winter, or we will have to wait until the spring.
07-07-2011 06:11 PM
You might check American Financial Resources if you don't think you are going to be able to get up to 620 anytime soon. Our bank requires 620 and my wife was at 607 so I am dealing with AFR with hopes for a last minute credit score miracle and USDA with no mortgage insurance or dow payment. Wells Fargo made me feel like a loser and I am saving their paperwork in case I run out of Charmin.
07-08-2011 03:35 AM
With less than "ok" credit (620 scores), I'd be cautious making an offer on a home if your only pre-approval is from Wells Fargo. Ever since they lowered their minimum score requirement below 600 on average I talk to 2 people a month (and read a few more here at the FICO forums and other mortgage forums) with not-so-great credit needing advice on what to do after Wells Fargo's pre-approval fell apart after they go into contract on a home when it gets to the underwriter. With any lender, Wells Fargo, Bank of America, or the small community bank on the corner with the all-star cusomer service, etc. if you don't know that your situation is a slam dunk approval, I'd tell the loan officer you need an underwriter to review your loan or you aren't proceeding.
07-08-2011 06:43 AM
Unfortunately, I'd have to agree with Shane. I am actually one of those people he talked to this month about this very same thing with Wells Fargo. Yes, they 'say' they approve loans for scores below 600, but I'm just not too sure. My husband's middle score is 668, but mine is 579 and that's all that counts, right? So, the loan officer said that we still looked like a very strong case. I had a couple of negatives on my report that we could easily take care of, but the loan officer said that even without taking care of them, we should be fine (with this new program). Well, went to underwriting and guess what...? NOPE!!!
Now, we are still working with them (sigh), but we've paid off all of the negatives and luckily encountered an error on my report. We got letters/faxes/emails from all the creditors and are still hoping for the best. This is what the loan officer is going to use to run a rapid re-score and HOPE for an increase in my middle score.
As Shane and others have mentioned, I'd be very cautious of the pre-approval from Wells or BoA. They really aren't pre-approvals. At least, in our experience they weren't. And, it is so sad because getting a pre-approval is supposed to allow you "to shop with confidence". Yeah, we did and now we are in jeopardy of losing this house we are under contract for. Sad face!!!