Info:
Credit: 675 - 700 (estimated once I pay down my CC util). Negatives: one collection from 2008; paid. One 90+ late at the end of 2010; paid. I might be able to PFD but if my scores are high enough I'd rather not delay the process. AAOA is close to 4, with 4 CCs, student loans, and a car loan all with perfect payment histories.
Income: 55,000/yr.
Source of Income: New job, but I just graduated professional school and job is directly in my field of study (it is my understanding that they will consider my income as extending back?)
Monthly Debt Payments: 250 car payment, 18 min payment on the only CC that will be reporting a balance. Student loan payment will be 0 at the time of applying (IBR). As soon as I start working I can get the payment to report at 170/mo, but that'll delay me while I wait for it to report. Loan consolidation will finalize during the process, so my IBR payments will extend out for exactly 1 year.
Assets/Reserves: About 4,500 in cash when we apply, but will go up during the process (we are moving into my in-laws cottage for a few months during home buying process and will be saving our estimated house payment (1200) each month. Further, we qualify for a 1st time buyer program that will pay 4% down (secured by a 2d mortgage - 0% interest and 30 year balloon payment), which will be available with FHA, USDA, or Conventional loans.
Location: Yakima county, Washington state. Property taxes in the area are generally about 1.2% of assessed value, which tracks FMV pretty closely.
Property: Single Family Home
Value: From 160k - 230k
Occupancy: Primary residence.
Transaction Type: Purchase
We are planning on doing this as soon as we can. 2 issues.
1st: Timing. I have a student loan consolidation in progress. It is straightforward (all direct loans currently, and will be consolidated into a single direct consolidation loan.) It should go through by the end of August, and report within a month from completion.
My question: Should I wait for the loan consolidation to report to apply? I know exactly what the payment will be, so can I get a pre-approval based on that amount, or will I have to wait for the monthly payment to hit my CR for them to issue a preapproval? Ideally, we would apply and get a pre-approval in the first half of august, get under contract on a home, and then have the consolidation finalize during the contract period just for the sake of time. (I'll be commuting 50 minutes each way until we move into a house.)
2nd: Scores. I currently have pretty high CC util (70+%), but that will drop to below 50% when our CC reports on 8/4. Right now, my scores are depressed by about 25 pts because of the maxed out card (we were traveling...I paid in full but after the statement date). My other cards are carrying balances as well, but only one will be reporting a balance of 30% (overall util will be very low) by August 15.
Question: I've heard of people working with thier LO to bring up scores during the process. If I apply in early August with a 675, will that hurt compared to waiting until the second half of August if my score is closer to 700 at that point? Or can I tell the LO that the score is rising bacause of lowered util.
That's about it! Our primary goals are 1) speed (for convenience and because rates are rising) and 2) cost. Part of the area we are looking at is USDA eligible, but the neighborhood we are most interested in is not. Will we possibly qualify for conventional with a down payment grant program at only 4%? I'm not violently opposed to an FHA loan, but it would reduce our buying power by about 10-15k because of the astronomical MI.
Thanks in advance!
