What Are My Chances?

Anonymous · ‎01-26-2016

I am looking into purchasing my first home and am wondering what are my chances of getting a decent loan. Here's my breakdown:

. Mortgage Credit Scores:
According to MyFico, my mortgage score is a 604 (however, this will soon increase as my student loans have been rehabilitated but haven't been updated on my reports yet).
2. Credit Negatives:

Type: (Collections/Late Payments) on 2 Student Loans totaling $1020.00
Status: Current on Payment Plan (after rehabilitation)
DOFD: Date of first delinquency is November 2010
Most Recent: Most recent late payment/delinquency is November 2010
Other Accounts:

Outside of Student Loans, I have 1 credit card which I have only made two payments on so far (just received it in November 2015) with less than 1% utilitzation

3. Gross Income. Currently make $28k per year via my Human Resources position (County job which I have been at since 2014).

4. Source of income. Employment only - no additional income

5. Monthly debt payments.
I have a total of $25 of monthly debt (which is my Student Loan). I have a credit card but never carry a balance so, no debt there.
6. Employment (for those who are employed).

Type of employment: Full-Time, Salaried Position
How long: Approx. 2 Years
How long: Approx. 10 Years.
I took a break from 2012 - 2014 when I had my baby; so I will only show very limited employment from the last 2 full years. Although I can show from 2004 - 2012 and then from 2014 - 15.

7. Assets/Reserves. I will have approx. $12k in Assets and Reserves combined (not much - so hoping for a low down payment)

8. Location: I have my eye on Rocky Mount, NC

9. Property Description: Single-Family home for primary residence, not a fixer-upper, but not brand new either. Move-in ready is my hope but if paint, carpet and small fixes are needed - that is fine as well.

10. Property Value. I am looking for a home between the price ranges of $60k - $85k
11. Occupancy. Primary Residence for myself and children. (No other income in the home at the time.)

12. Transaction Type. Purchase

What are my chances at finding a mortgage loan? Any tips or similar experiences? Please share! Thank you in advance!

Imperfectfuture · ‎01-26-2016

Best bet, get another card, cap one. Put a little money on card each month, let it report (carrying zero balance on credit cards hurts your score, one card not enough).

After loans rehabbed, and two CC's reporting (alternate cards each month), your best bet is USDA Direct. More bang for your buck, higher loan limit with your income. Need middle credit score of 640, mortgage. Lots of folks using USDA direct from NC on here.

Signature needs updating

Imperfectfuture · ‎01-26-2016

To add, they will make you use anything over 15k for down (total assets, all cash counts, including retirement), You do not have that much, but better than moi. Use for moving expenses.

Signature needs updating

Anonymous · ‎01-27-2016

@Imperfectfuture wrote:
Best bet, get another card, cap one. Put a little money on card each month, let it report (carrying zero balance on credit cards hurts your score, one card not enough).

After loans rehabbed, and two CC's reporting (alternate cards each month), your best bet is USDA Direct. More bang for your buck, higher loan limit with your income. Need middle credit score of 640, mortgage. Lots of folks using USDA direct from NC on here.

I have a question. Is this because she only has 1 credit card reporting a 0 balance? What if she had lets say 3 cards, would it be bad for her score if one card report zero balance while the others report a low balance?

Anonymous · ‎01-28-2016

I think that advice was given because I only have one card. I've heard that it is better to have two to three cards vs. just the one; however, I didn't want to apply for credit I didn't need.

Hopefully that doesn't stop me from being approved. I've made sure my utilization/balance never reached more than 3%....I'm really trying to do the right thing the right way! So, I've been digging through these forums/posts now to squeeze some of the seasoned posters of some valuable information.

Anonymous · ‎01-28-2016

Thanks so much for the advice. I am very hesitant to apply for new credit now (before at least trying to obtain a mortgage)....I'll try my hand at it in a couple of months (probably late March) and see what happens.

I have heard of individuals getting mortgages with really messed up credit....and was wondering what my chances were with what is considered "Fair/Good" credit. You aren't the first person who suggested adding more credit cards to my mix (even though I truly don't want to - have heard too many horror stories about ppl getting into credit debt by getting cards they didn't need).

Wish me luck?

Anonymous · ‎01-28-2016

The problem is that you have a very, very thin file. And 2/3 of your file, the student loans, have had lates. Even though they're old lates, they still affect your score. The only other thing you have is a very new credit card account. So, thin file with negatives & minimal positive. It's going to be an uphill battle.

ashjt2011 · ‎01-28-2016

I would agree with everyone else - add another credit card or two. Not only will it boost your credit score by using and paying off - but it will give lenders more to look at.

Most lenders automated desktop looks for at least 2-3 open credit lines with a decent history. I've seen people get approved without it, but only under manual underwriting.

Automated desktop looks for a good mix of credit, along with multiple lines and a good age of accounts.

Anonymous · ‎01-29-2016

Thanks, everyone!

I am going to apply for a mortgage in early April and see if it goes through. If not, I will definitely take this advice and open up a new credit line and garden a little bit.