It's almost impossible to predict what will happen with scores because everyone's experience is different, but it's definitely possible to gain 50-70 points in 6 months. What are the exact negative marks on your credit reports and do you have any revolving debt? Paying down revolving debt (e.g. credit cards) is the absolutely fastest and easiest way to get a score increase.
On a sidenote about Wells Fargo, many people here have reported that WF will actually go down to a score of 580, but requires a minimum of %5 down for a middle score less than 620.
Six month old lates are going to hurt bad but you likely won't know for sure until you get to UW. Typically they want one year of no lates but exceptions can be made.
I am in a similar situation.
I had a short sale closed in March 2010. After the short sale reported, my creditors reduced my credit limits. I also had a few medical collections. Anyway, right after the short sale closed, I paid off all medical collections and sent out GW letters. That didn't work. I disputed with all 3 credit agencies. I asked them to send me the contract with my signature on it, otherwise, they're not mine and should be deleted immediately. After two months, all medical collections were gone from my reports. I saw the light :-). I started using my credit cards wisely and setup automatic minimum payment + $50 five days before the due date. I sat back and watched my scores climbing slowly from 538 to a mid FICO score of 676 as of a few days ago.
My LO said I qualify for up-to 635k if I have 20% down payment. But, no no, I am looking for something under 300k for easier payment :-)
So, I'd suggested that you try to send a PFD to get rid of that $270 and your score will jump at least 40+ points. Google PFD for sample letter.
BTW, thanks for the info on WF. I might also check with them or Chase to see what they got to offer.
I was just denied a FHA Wells Fargo pre-approval with a high credit score of 676 and a mid score of 637. He told me I had to wait 3 months and see if my mid score goes up 3 points.
He told me I had to have a 640 mid score to qualify. I thought Wells Fargo did FHA loans at 620, I was wrong.