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Would it be possible for me to get approved for a mortgage?

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lizziebeans
Established Member

Would it be possible for me to get approved for a mortgage?

Hi all,

I am looking into the possibility of purchasing a home. I'm very afraid that I will not be able to get a mortgage because of my past financial irresponsibility. I've paid off all of my debt and changed my ways dramatically. I'm now in a position where I can save my money. I am wondering what is the possibility of getting a mortgage in the next 6 months. I am hesitant to apply for pre-approval, for fear of being laughed out of the bank because of my crappy history. Can anyone with experience in this arena tell me where you think I'd stand? Additionally, my fiance has top notch credit scores, but he owns a home already and is not in a position to sell it right now. I'm wondering if there is some way I could be a first time buyer and he could co-sign with his good credit scores. Both he and I will contribute to the down payment, mortgage, and bills. What do you think?

 

Info is below. Thanks very much in advance.

~Liz

 

Credit

Scores - Transunion 681, Equifax 641, Experian PLUS Score 653.

Negatives - 2 60-day late and 2 90-day-late on credit cards from 1/11(To clarify, they were gradual 30, then 60, and in two cases then 90-day-lates. I paid them in Jan to bring accounts current, then gradually paid off the entire balances through the winter and spring of this year). One paid collection in the amount of $73 from 7/06. Two 30-day-lates on a car loan (6/06, 3/06) that has been paid off since 07.

Length of credit history - 9 yrs.

Credit sources and balances as follows: Merrick  CC $0 balance/$1200 limit, CreditOne CC $0 balance/$1000 limit, HSBC CC $0 balance/$1075 limit, Macy's Store CC $0 balance/$160 limit, Mastercard through my bank $300 balance/$3000 limit, Auto loan with Ford Motor Credit balance remaining is $23K, SallieMae Student Loans balance remaining is $20K 

 

Income

Gross income - 59K 

 

Source of income

Salaried Employment

 

Monthly debt payments

$780 ($500 car payment, $150 student loan payment, $130 car insurance)

 

Employment

Full time salaried employment. Been at this job for 5 years, in the field for 10.5 years.

 

Assets/Reserves

Savings $1000 (and counting)

401K with approx 30K, but it does NOT allow withdraws or loans as long as I'm employed (Any way around this??)

 

Location

Pennsylvania (Philadelphia and surrounding suburban area)  

 

Property

Single family house

 

Value

200K - 250K

 

Occupancy

Primary residence

 

Transaction Type

Purchase, first time home buyer 

Message 1 of 5
4 REPLIES 4
RW771
Frequent Contributor

Re: Would it be possible for me to get approved for a mortgage?

I have a similiar situation so I'll try and help you the best I can with what I've experienced so far!

 

My fiance still technically owns the house that his ex-wife and her new husband are currently living in. In the divorce she was court ordered to re-finance the house (this was back in 2007) and to this day still has not. He has argued repeatedly with the bank and showed them the court order showing where she was ordered to re-finance the house in her name but they continue to tell him that he's still liable until she either refinances or sells the house. We've talked with an attorney about this and basically he will have to go to court over this and are being told that the judge would either have to order the bank to have him removed off of the mortgage note or she will have to refinance or sell.

 

He bought the house back in 2006 for $141K and it still shows the amount still owed as something like high $130K, putting his DTI through the roof! So when we went to the bank back in June to see just where we stood and if it was even possible to buy the house together we were told a number of things. First of all, his DTI ratio was so high, there was no way the bank would even look at him as far as getting another home loan (even as a co-signer since we also wanted to use his income). I don't know if this may be the same with your situation, but that's the first thing that came to my mind when I read your post.

 

I too am recovering from not so great credit scores/history and took the plunge and went to the bank back in June. I really didn't know where I stood but knew this would be the first step I needed to take in order to see just where I stood and where my credit scores really were. They didn't laugh at me (and won't laugh at you either) and my credit only took a moderate hit, and I only lost about 6 points. Like you, I'm holding on to every little point I can get but at least I left the bank knowing where I was and what all I needed to do between now and November (when the LO told me to come back and try again).

 

I am pre-qualifying on my own since we cannot include my fiance whatsoever. Of course we knew if we got married before buying a home the chances wouldn't be so great, considering we'd have to factor in all his debts as well, and his high DTI ratio with the other house would kill us!

 

Sounds to me like you'd be better off trying to pre-qualify on your own (or may have to) like I am having to. I totally understand where you are coming from and going through the exact same thing. I'd take the big jump and go to the bank and see what they say! Good luck to you!

05/31/2013 672 EQ (Fico), 03/08/2012 697 TU (Fico)

Closed on my first home 12/07/11! Officially a homeowner, thanks to this forum!!!

Message 2 of 5
lizziebeans
Established Member

Re: Would it be possible for me to get approved for a mortgage?

Equifax score is actually 645. Not enough to make a difference, but I figured I'd update that anyway. Thanks again for any insight. -Liz
Message 3 of 5
lizziebeans
Established Member

Re: Would it be possible for me to get approved for a mortgage?

Thank you SO MUCH for your reply! I feel better knowing I'm not the only one going through this. My fiancé actually has some equity in his house, because he bought at a reasonable cost and renovated on his own. I'm not sure how much, or if it would need to be reassessed or something. He has paid extra every month on his mortgage as well. I think we are pretty lucky in that respect. Sound like you are really in a tight spot with your fiancé's house. I hope you can work it out without going to court. Who needs lawyer fees on top of everything else. Good luck! -Liz
Message 4 of 5
Booner72
Senior Contributor

Re: Would it be possible for me to get approved for a mortgage?

I have a horrible credit report w/ 8 medical collections (paid) a judgment from 2010, and a bankruptcy in 2005.  But my scores qualified, and I had strong compensating factors with my job and income.....and I bought the house.

 

I think that your late payment from 1/2011 will be a hiccup - I'm pretty sure you need 12 months of "clean credit" . Good Luck!

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Message 5 of 5
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