Will I qualify?

[Anonymous]

Hello,

I am about to apply for an FHA loan and am pretty pesimistic about my chances of qualifying.  The mortgage guy that I am talking too (local independant shop that underwrites their own loans) states that pretty much as long as I have a 620 score, have the money in the bank to pay for the down payment and closing costs and that my debt/income is fine that I will qualify regardless of what other things may be on my credit.  I am sekptical because I do have a few late pays as well as a recent repossesion (completely paid off) however I want to trust that he isn't leading me astray.  I will have over a 620 when I apply, I do have plenty in the bank for DP/costs, I make more than enough a month to meet the payment requirements on the loan I am seeking and my debt/income is non-existent (I have only 1 open CC which is paid off and no other revoloving credit accounts).  So, in general with those things considered and knowing I have those issues on my report including the recent repo, should I be able to qualify for an FHA?  Any info is greatly appreciated!

Thanks!

[ShanetheMortgageMan]

How recent is the repo?

[Anonymous]

Around 5 months or so.

[Anonymous]

Anyone have an idea on this?  I don't mean to seem pushy it's just that I'm supposed to go in on Monday to start the application process and I would like some either reassurance or reason to not have my hopes too high from a neutral source.  If you need more specific info I can prvide it but in general the repo being on my credit is the only major thing that I'm worried about.

[ShanetheMortgageMan]

I help my clients during the day so I apologize if my responses don't come quickly.  When I get a break in the action/down time I jump on here to help others figure out their chances/answer questions relating to mortgage qualification.

FHA wants to see clean credit for 12 months, so since the repo is 5 months ago, it would be a red flag to an underwriter.  However you have paid it off, so the underwriter may wonder why the payments weren't made if you were able to pay it off after it went to repo status.  That would be where the concern lies, that you may have had the means to pay it, but chose not to.  Still, overall, it's a good thing that it's paid vs. not paid.  I could see an underwriter being OK with it, and I could see an underwriter having an issue with it and not approving because of it, just one of those situations that you'd need to have an underwriter check out your file in order to be sure.  Worst case you have an inquiry, waste a couple hours or so doing an application, putting together the documents the LO wants, and wait a few days for a response.  Being denied for a mortgage stinks, but at least you'll find out what is preventing you from qualifying and will be better prepared next time you apply.

[Anonymous]

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@ShanetheMortgageMan wrote:

I help my clients during the day so I apologize if my responses don't come quickly.  When I get a break in the action/down time I jump on here to help others figure out their chances/answer questions relating to mortgage qualification.

FHA wants to see clean credit for 12 months, so since the repo is 5 months ago, it would be a red flag to an underwriter.  However you have paid it off, so the underwriter may wonder why the payments weren't made if you were able to pay it off after it went to repo status.  That would be where the concern lies, that you may have had the means to pay it, but chose not to.  Still, overall, it's a good thing that it's paid vs. not paid.  I could see an underwriter being OK with it, and I could see an underwriter having an issue with it and not approving because of it, just one of those situations that you'd need to have an underwriter check out your file in order to be sure.  Worst case you have an inquiry, waste a couple hours or so doing an application, putting together the documents the LO wants, and wait a few days for a response.  Being denied for a mortgage stinks, but at least you'll find out what is preventing you from qualifying and will be better prepared next time you apply.

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This is exactly my mentality!!! I know that I have had some credit issues in the past, and I am not sure if my income or DTI will make the cut, but I am going to go for it anyway!!!!! If I get denied, then it wasn't the right time. I'll give it 6 months to a year, and if it's God's will, I'll have it all together!! And I will get the approval and a new home!! It'll happen...when it's supposed to. :-)

Jelly  

[Anonymous]

Just wanted to update and thank everyone again for the information!  I ended up applying on Friday and just heard from the LO this afternoon that I passed through the automated underwriting and that he looked everything over as well and thinks that I am good to go!  He stated that they still need to do income verification and a few other manual pieces however that he didn't see anything that he thought would stop the process now!  My median FICO ended up being 623 and the repo is still showing on my credit so this was very good news!!  I am currently set to close on the 28th of this month!!