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Advice for applying for mortgage - mid-600s

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Anonymous
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Advice for applying for mortgage - mid-600s

DH's mother can no longer work due to health problems - we will be taking her in sometime in the next few months.

 

Dh and I have been working towards the goal of owning a house for a while and this cinches it, but his credit is shot.  For those who didn't read earlier post of mine, here's the reasons:

 

*Biggest problem - Ex-wife got their house in the divorce, along with order to refinance out of his name in 90 days.  Shocker!  She didn't, and then began making lots of late payments.  After legal threats, she abandoned house. We took her to court, won, judge orders house sold. Took 8 months to get rid of the house, short sale.

 

*He also had a $30 collection on his record, a doctor copay whose bill was sent to the old house after he moved out and ex never told him about the bill.

 

*Lastly, the car that he purchased for his ex-wife when they were together - she was responsible for payment, and consistently paid late but not late enough for him to be made aware of the problem (at the time, he had a house and vehicles, no need for credit cards so he never thought he needed to check his credit report).  He got the car in the divorce and made payments on time, traded it in after a few months and that was 3-4 years ago.

 

The steps we've already taken:

  • Sent letter to CA asking to delete the $30 collection, explained the situation and offered proof of divorce, waiting to hear back.  Honestly I would be shocked if they said no over such a small thing, but I guess I should expect the worst.
  • Sent a letter to bank that handled car loan asking for GW deletion, explained the situation and offered proof of divorce, waiting to hear back.  DH just texted me to say he called and the "proper person will call on Monday"
  • Now that short sale is done on old house, we have sent a letter to the original lender, Everhome, to ask for a GW deletion of the account.  Explained situation, records will show that he paid mortgage on time EVERY MONTH until the month his divorce was final and his ex was legally responsible.  Offered to submit court documentation (divorce, our suit against her and judgments).  IF Everhome agrees, we will then approach Green Tree about a GW deletion (they bought the debt 2 months into the short sale).
  • He was able to open a secured credit card, currently under 5% balance, it;s helped a lot in building his credit up, but only $600 limit, not much.

 

DH makes decent money and is about to receive a promotion and nice raise (like, I am hoping he messages me TODAY after their meeting), which would allow us to obtain a VERY nice mortgage, if his credit was stellar.  Right now it's sitting around 630-660 between the 3 credit agencies.  I do not have a lot of income, my credit is around 720, and my mother has offered to help by cosigning if needed.

 

Any advice for us?  Has anyone applied for a mortgage in a situaiton like this (I know, every situation is different)?  We have been renting for the past 3 and a half years, I could easily get a letter from the landlords that we have always paid on time, but not sure a lender would even care.  We are hoping to find a lender that will look at the proof of circumstances, not just pull the credit score and make decision based on that.  Anyone had better luck with certain mortgage lenders?  Any thoughts owul be appreciated.  Sorry for the wall of text, and happy to answer any other questions I didn't provide answers to.

 

 

 

Message 1 of 6
5 REPLIES 5
Anonymous
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Re: Advice for applying for mortgage - mid-600s

You should just talk to a mortgage company and see what they say. His score is decent. Some lenders work with people who have a 620 score.
Message 2 of 6
Anonymous
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Re: Advice for applying for mortgage - mid-600s

We were able to buy a house with a 620 credit score. We went to a builder (Ryan homes) and they said no problems. Checked our debt to income ratio and told us what we could afford and we picked a floor plan, a lot, and things like carpet, cabinets, ect. Then after 2 months of making mortgage payments to Ryan homes loan office- our account was sold to Bank of America. We were made aware that the lender would change so no suprises. We did have VA backing so I am not sure how much that helped us get a home loan with 620 credit. 

 

I have heard- and in my case it was proven- that going through a builder is an easier way to get approved with lower credit. But I would say- with your husband's income and your credit score you both should be fine. 

Message 3 of 6
Anonymous
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Re: Advice for applying for mortgage - mid-600s

We can't go through a builder, unfortunately - we're in New Jersey (every square inch is already built on! lol), but the news that others have had success is great to hear.  We are very much looking forward to finding a place of our own.

Message 4 of 6
justrock
Frequent Contributor

Re: Advice for applying for mortgage - mid-600s

How long since the short sale??  Even though the divorce Court ordered the wife to take over the mortgage she never did, so your husband was still legally obligated for the loan.   I believe there are a certain amount of years after a short sale you have to wait before you can get a new mortgage.


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Message 5 of 6
Marcos8
Established Contributor

Re: Advice for applying for mortgage - mid-600s


@justrock wrote:

How long since the short sale??  Even though the divorce Court ordered the wife to take over the mortgage she never did, so your husband was still legally obligated for the loan.   I believe there are a certain amount of years after a short sale you have to wait before you can get a new mortgage.


I believe it 2 years for FHA and 3 for conventional. 

Message 6 of 6
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