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Valued Contributor
rootpooty
Posts: 1,755
Registered: ‎10-28-2011
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What should I expect? Need advice

Good evening.  I'm usually the one helping others in the rebuilding section or the credit cards section and now I find myself here cause I'm lost with some important questions and hope some of you can give me guidance.  I only have 2.5 years of credit.  My accounts are showed below as well as a Kay account that started with a 3.6K balance that is now zero and I also have a vehicle loan that has 14k remaining on it.

 

I dont know my scores but i would expect eq and tu to be at least low 700's no baddies and on ex i have 2 medical bills less that 1000 total that are 5 years old and a paid closed child support tradeline that is just sitting there.  I got tu and eq to delete the child support tradeline but ex wont budge,  I'm no longer in arrears just ordered to pay 315 per month.

 

Ive been with my employer going on 4 yrs now and work for a rather large company we are number 3 biggest in our industry.  My income started the first year at 36k which increased to last year me finishing with 58k earnings for the year.  This year will be more I dont know how much cause of the overtime I have worked most of this year more on that later.

 

For the past year I've carried balances on all my accounts prob around 50-60% util every month however,  earlier this year my business went through the roof which required me to work 12hr shifts 7 days a week.  Lots of overtime I have done that for the past 4 mos now and have paid all my accounts off except the vehicle loan.

 

I have 10,000 dollars to put towards a down payment.  I'm tired and I really want to buy a house.  I bank with Chase and I am a member of navy federal credit union.

 

What should my next steps be?  Im mainly waiting for the last bit of accounts to report zero balances and there will be one card that reports that small balances from my coffee purchases every morning.

 

What I'm looking for is around 130k  I believe I could easily afford 850 per month but dont really want to exceed that.  I live in Indiana.

 

Any help would be greatly appreciated

NFCU plat 5k | NAVCHECK 5k | NFCU cashrewards 3k | BOFA 123 3k |
Chase Freedom 1.5k | Amazon 1800 | Walmart 1450 | Buckle 300

On the prowl for Chase Sapphire Preferred!
scores 7/14 647 622 630 (85%util)
scores 8/14 767 760 758 Boom! finally in the 700 club
Frequent Contributor
bdhu2001
Posts: 481
Registered: ‎04-24-2014
0

Re: What should I expect? Need advice


rootpooty wrote:

Good evening.  I'm usually the one helping others in the rebuilding section or the credit cards section and now I find myself here cause I'm lost with some important questions and hope some of you can give me guidance.  I only have 2.5 years of credit.  My accounts are showed below as well as a Kay account that started with a 3.6K balance that is now zero and I also have a vehicle loan that has 14k remaining on it.

 

I dont know my scores but i would expect eq and tu to be at least low 700's no baddies and on ex i have 2 medical bills less that 1000 total that are 5 years old and a paid closed child support tradeline that is just sitting there.  I got tu and eq to delete the child support tradeline but ex wont budge,  I'm no longer in arrears just ordered to pay 315 per month.

 

Ive been with my employer going on 4 yrs now and work for a rather large company we are number 3 biggest in our industry.  My income started the first year at 36k which increased to last year me finishing with 58k earnings for the year.  This year will be more I dont know how much cause of the overtime I have worked most of this year more on that later.

 

For the past year I've carried balances on all my accounts prob around 50-60% util every month however,  earlier this year my business went through the roof which required me to work 12hr shifts 7 days a week.  Lots of overtime I have done that for the past 4 mos now and have paid all my accounts off except the vehicle loan.

 

I have 10,000 dollars to put towards a down payment.  I'm tired and I really want to buy a house.  I bank with Chase and I am a member of navy federal credit union.

 

What should my next steps be?  Im mainly waiting for the last bit of accounts to report zero balances and there will be one card that reports that small balances from my coffee purchases every morning.

 

What I'm looking for is around 130k  I believe I could easily afford 850 per month but dont really want to exceed that.  I live in Indiana.

 

Any help would be greatly appreciated


Are you looking at a VA home loan?  If so, then you're on the right track.  Be sure to save additional emergency funds, then go on line to Equifax and purchase an  Equifax '04 (Equifax Beacon 5.0 ) credit score and credit report so that you'll know where you stand. If you aren't getting a VA loan, you need to save 20% down pament so that you don't have to pay PMI which is extra $200 over the life of the loan.

 

After you know what your score is, search the web for current VA mortgate interest rate and use the mortgage calculator on this site to make sure you're in the ballpark for the amount of loan your comfortable with having.  

 

From what I see on this forum your credit union and USAA work really well, but I see plenty of adds for VA loans on the web so you have choices. The amount you're looking for is the median home price for Indiana so you should be able to find a home you'd like.

 

 

Current Score: EX 839 EQ 794:TU 792 on 7/4/14; EQ from myfFico on 6-26-14
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Goal Score: 800+
Valued Contributor
rootpooty
Posts: 1,755
Registered: ‎10-28-2011
0

Re: What should I expect? Need advice

I do not qualify for a VA loan.  Im not active or retired military.  What are my options at this point?  I have 10k saved up and looking for about 120-130k loan

NFCU plat 5k | NAVCHECK 5k | NFCU cashrewards 3k | BOFA 123 3k |
Chase Freedom 1.5k | Amazon 1800 | Walmart 1450 | Buckle 300

On the prowl for Chase Sapphire Preferred!
scores 7/14 647 622 630 (85%util)
scores 8/14 767 760 758 Boom! finally in the 700 club
Frequent Contributor
bdhu2001
Posts: 481
Registered: ‎04-24-2014
0

Re: What should I expect? Need advice


rootpooty wrote:

I do not qualify for a VA loan.  Im not active or retired military.  What are my options at this point?  I have 10k saved up and looking for about 120-130k loan


With the amount that you currently have, FHA.  But you're close to having 10% for a conventional loan. Save a little more and save for closing costs.  When you find a home, try to get the seller to pay the closing or split the closing costs.  If the medical you mentioned is paid & listed on your credit report, you might want google HIPPA process.  

 

Go FHA if you must, but you'll pay an extra 1% as mortgage insurance for the life of the loan. With 10% conventional you pay extra insurance until you get your mortgage below 80%. I still think your credit union is probably your best bet, but mortgage places fight for your business so go with whoever has good ratings and offers the best interest.

Current Score: EX 839 EQ 794:TU 792 on 7/4/14; EQ from myfFico on 6-26-14
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Goal Score: 800+
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Senior Contributor
StartingOver10
Posts: 4,076
Registered: ‎03-06-2010
0

Re: What should I expect? Need advice

[ Edited ]

rooty - you can get a conventional loan with 5% down + closing costs and pre-paid expenses. You can negotiate with the seller for a contribution toward your closing costs too. For conventional loans the seller's contribution is limited to a maximum of 3% of purchase price.

 

The MI on a conventional loan does NOT last for the life of the loan. That is only for FHA loans with a 30 yr amortization. BTW - there are two mortgage insurance costs for FHA loans 1)  UFMIP (aka Up Front Mortgage Insurance Premium) usually financed into the loan and 2) a monthly cost that is equal to 1.35% annually of your mortgage amount. If you borrow $125k then your monthly MIP is going to be $140.63/mth.  If you decide to go FHA - then be prepared to refi out of it as soon as you can comfortably do so. Just weigh all the factors.

 

Cost of the MI is significantly less for a conventional loan than it is for an FHA loan. However, the cost of MI for conventional is credit score sensitive. The higher the score, the lower your costs. If you get over 720 you end up with very low cost MI. It automatically drops off of your loan when your LTV reaches 78% of the original purchase price.

 

There is a Freddie Mac loan that you can get with 10% down and no MI. PM me and I can get you to a source that does those loans if you are interested.

Valued Contributor
rootpooty
Posts: 1,755
Registered: ‎10-28-2011
0

Re: What should I expect? Need advice

I'm not looking to do an FHA loan.  Just from the little research I have done it seems that is the way to go for people with avg credit.  The 2 medical collections are listed on experian only and they are less than 1000 combined.  They are about 5 years old.  10k is all I have to put down on a mortgage.  I work with several people who recently purchased for less than 5k down with a conventional loan.

 

My plan is to get a pre approval from Chase then see what my credit union NFCU has to say.  I mainly wanting to go with Chase and not have everything tied up with my credit union IE being 3 credit accounts saving checking and an auto loan.

 

Last but not least.  Is it absolutely neccesarry to wait to get an auto loan till after closing or is it safe to get one now.  I currently have an auto loan now so it would just be me trading it in and still maintaining one auto loan or should I wait?  

 

Thanks for the help

NFCU plat 5k | NAVCHECK 5k | NFCU cashrewards 3k | BOFA 123 3k |
Chase Freedom 1.5k | Amazon 1800 | Walmart 1450 | Buckle 300

On the prowl for Chase Sapphire Preferred!
scores 7/14 647 622 630 (85%util)
scores 8/14 767 760 758 Boom! finally in the 700 club
Member
pm11222
Posts: 11
Registered: ‎06-13-2014
0

Re: What should I expect? Need advice

[ Edited ]

I see that most people on here recommend not getting any new tradelines before applying, but I did get a car loan the month before applying and had no issues. Your score will go likely down a little from the inquiry and AAOA being lower, so it probably also depends on if you need the few points it will cost you to qualify

3/15/14 Mortgage lender pull: Equifax 790, TU 775, Experian 764
4/21/14 Mortgage lender pull: Equifax 782, TU 780, Experian 751
Frequent Contributor
bdhu2001
Posts: 481
Registered: ‎04-24-2014
0

Re: What should I expect? Need advice


rootpooty wrote:

I'm not looking to do an FHA loan.  Just from the little research I have done it seems that is the way to go for people with avg credit.  The 2 medical collections are listed on experian only and they are less than 1000 combined.  They are about 5 years old.  10k is all I have to put down on a mortgage.  I work with several people who recently purchased for less than 5k down with a conventional loan.

 

My plan is to get a pre approval from Chase then see what my credit union NFCU has to say.  I mainly wanting to go with Chase and not have everything tied up with my credit union IE being 3 credit accounts saving checking and an auto loan.

 

Last but not least.  Is it absolutely neccesarry to wait to get an auto loan till after closing or is it safe to get one now.  I currently have an auto loan now so it would just be me trading it in and still maintaining one auto loan or should I wait?  

 

Thanks for the help


It's not absolutely necessary, but remember every hardpull affects your FICO score (until you go over 7 for the year).  You don't want a car to stop you from getting the best interest rate.  A drop in your rate can cost you $100 per month. However, if you're itching to buy a car now, do the following: pay for FICO score on here then use the simulator to see how buying a new car will affect your credit score; use the mortgage calculator to see how much house you can afford, with your new car payment. Pay for your Beacon or FICO 04 score so that you'll know what your FICO mortgage score is.  When you have all the data before you, make your decision.

Current Score: EX 839 EQ 794:TU 792 on 7/4/14; EQ from myfFico on 6-26-14
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Goal Score: 800+

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