Will I qualify?

[Anonymous]

I'm still in the process of rebuilding. With the information provided, can anyone give me a halfway decent guess if I would qualify at the end of this year/beginning of next, and what steps I should take to improve my changes (aside from GW letters, etc)?

Credit

FICO score as of 04/01/2015: 570 (Equifax)

Collections (DOFD listed)

(1) medical collections, paid, 10/2009 (loan officer said to not worry about paid medical collections?)

(1) medical collections, paid, 07/2010

(1) medical collections, paid, 01/2010

(5) medical collections, paid, 01/2012

(1) utility collection, paid, 07/2012

Charge Offs

(1) bank card, paid, 02/2012

(1) store card, paid, 11/2013

(1) second mortgage, (will be settled/paid before apping), 07/2011

(4) installment loans, paid, 03/2012 (loan officer said these would be mitigated to some degree, as I was a cosigner and they were covered in a divorce decree?)

Foreclosure

DOFD: 09/2010

Date of sherrif sale: 09/2012 (loan officer said this is the date mortgage companies care about?)

Lates

(2) student loans, combined balance $7,000 (hoping to have paid before apping), 17 lates on each from 2011 to 2014, in good standing now

(1) closed store card, closed in good standing, 1 30-day late from 2011

(1) closed store card, closed in good standing, 1 30-day late from 2012

In Good Standing

(1) auto loan, never late, paid 06/13

(1) auto loan, never late, paid 03/15

(2) sold student loans, 2010

(6) closed credit accounts, never late, all opened between 2002 and 2005, and closed between 2010 and 2012

(2) bank cards, $500 limit, just opened and haven't reported yet

Income/Employment

$65,000 annually, salary from FT employment (W2). Been here for 6 months now, will be over a year when I app.

Previously self-employed, with an annual income of $35,000

Monthly Debts

$500

Down Payment

$25,000

Property

Single family home on parcel of land (looking at 3 to 5 acres), zoned multi-use ag

Boone or Winnegabo Counties (Illinois)

Primary residence

Looking to purchase in the range of $60,000 to $100,000 for a handy-man special (fix up while we ride out our current lease). Will only consider properties with working well/septic (or water hookups), and electrical/plumbing that works and meets code - we can do the other work, like roofing, drywall, flooring, windows, etc.

---

We have until August 2018 to stay in our current rental if we so desire, so if we should wait much longer to app, we would have a larger down payment to be able to purchase a move in ready house. Most of the "baddies" would have fallen off my CR by then, too. But I have a laundry list of reasons I want to get out of our current residence (would rather not list), which is why we're thinking a well-priced fixer-upper could be in our future. 

---

Also, based on all of this, what are the chances of getting a small (less then $20,000) mortgage on a home that needs to be rehabbed, with $10,000 down? (We came across a deal, but would need to act now and I really doubt we could get a note for it.)

[Anonymous]

Bump. Anyone?

[Anonymous]

I am not an expert - I am just going on what I've personally experienced as I'm also going through the rebuilding "Will I qualify?" process myself, but I would highly doubt that you will qualify this year without some luck and heavy cleanup work.  Those 17 student loan lates will be the killer in both frequency and recency.  In my situation, I have a single 30-day late for a car payment in 8/2013.  It's an error by the bank (I have my payment confirmation for that month) and they are dragging their feet in fixing it. However, because it's within two years, my LO will not offer me a pre-approval until the error is fixed, or until it's aged 2 years.  I would get started on GW letters regarding the student loan lates, and the 2013 store card charge-off.  Also, do everything you can to make yourself attractive to an underwriter by assuring them that NO ONE will be able to hold you up for money (except for them).  That means paying off that second mortgage ASAP.  I would recommend using your saved up cash-on-hand for that now, so that by the time you have downpayment money saved back up, that second mortgage is paid off and further in the distance.  That way you demonstrate long-term planning, and a pattern of taking care of your obligations for the right reasons, and not in a reactionary way for the sole purpose of obtaining more financing.

[Lemmus]

...there is no killer in your info ...you'll need 12 mts steady employment plus tax returns from self employment for previous 3 yrs

...the 2013/14 lates will require 12 mts of on-time payments since last late

...seriously doubt you'll find a mortgage for 20k ...thats a cash sale ...just isn't any money in it for the lender ...but SO10 says Chase does small mortgages so you might try there ...but the big banks also tend to be more conservative in their loan requirements 

...the "fixer-upper" can be a problem in any mortgage ...the FHA 203k program is one you should probably look into ...I'd also look at USDA rural loans in your situation ...however, be prepared to face the issue that when repairs are needed every lender I know of will require the repairs be done by licensed contractors ...hth

[Anonymous]

The second mortgage has been taken care of since I posted.

GW letters won't work with the SL. I tried, directly to the EO, and got a very nice callback from a woman well-versed in credit repair. She gave me a lot of tips, apologized that certain programs weren't offered sooner, but said there nothing to do done as they didn't make an error in billing or reporting. 

Any loan I apply for will be under the "extenuating circumstances" rider for income reduction.

I've adjusted my expectations for applying. I don't want to stay where we are, but I have a feeling getting a note is going to be a fairly long process with how my credit is today. We recently took out an installment loan (under $10k) and it took over a month to get it through. I'm trying to keep credit rolling while I wait, to prove more of a financial rebound rather than a crash and stagnation.

At this point, I'll have to let everything simmer on my CR for at least 12 months before approaching anything, make sure my utilization is in order, and stay in contact with the doctors/hospitals to ensure there aren't any festering accounts waiting to be pushed out to a CA. For example, I had a hospital visit a few months back and have still not received a bill for it. I've called them once a week to find out the status and it's always "everything's fine, you'll be getting a bill soon". I have a feeling that bill will be coming on CA letterhead, though.