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Mortgage Score/New Construction

Frequent Contributor

Mortgage Score/New Construction

I'm in the process of getting a mortgage - already have a signed purchase agreement on new construction with closing set for August 31. 

 

My scores from the lender are 523/547/563. Lender says I need a 580 for guaranteed approval through automated underwriting on FHA mortgage. Husbands scores are clean in the low 700's and has NO debt. I have to go on the loan as my income will lower the DTI. 

 

Current scores on MyFico 3B reports pulled on March 13: 548EQ/558/TU/568EX. My mortgage scores are reporting at 541EQ/609TU/555/EX

 

I have the following collections on my report: 

Comenity(TU/EX/EQ) - $751 Charge-off from Jan 2017 - settled for $469; account now reporting as paid and closed

BB&T(TU/EX/EQ) - $1,411 Charge off from 2011 - called and can settle for $705

Fair Collections & Outsourcing(EX/TU/EQ) - $1,668 Collection from 2011 - settled for $166.80; account now reporting with $0 and open

National Credit Systems(EX) - $4,161 collection from 2011; reporting on Experian only and can get early exclusion on May 29, 2017

DeVry(EX) - $1,300 Defaulted loan - applied for consolidation and amount will absolve into this and be deleted from Experian

Berks Credit (EX) - $545/$683/$724 - reporting on Experian only and can get early exclusion on July 29, 2017

 

Good Accounts:

Capital One - $500 secured platinum card since Apr 2016 - reporting balance of no more than $30 and this month will report at $0 balance

NFCU - $1,000 secured Visa since March 2017 - has not reported on credit report yet

Capital One - Authorized User on husbands account - he's had the card since June 2013 with $2,500 limit and current 18% utilization - not reporting on credit report yet

Westlake Financial - auto loan - reported as paid and closed since December 2016 - paid through vehicle trade-in

 

Is there anything that I can do to boost my scores? Any suggestions?

FICO8 Scores - 625TU / 640EQ / 649EX
On Mortgage Journey
Starting Mortgage Scores (Feb 17) 523EQ / 547TU / 564EX
Mortgage Scores Aug 17 624EQ / 649TU / 650 EX
8 REPLIES
Super Contributor

Re: Mortgage Score/New Construction


rookie08 wrote:

I'm in the process of getting a mortgage - already have a signed purchase agreement on new construction with closing set for August 31. 

 

My scores from the lender are 523/547/563. Lender says I need a 580 for guaranteed approval through automated underwriting on FHA mortgage. Husbands scores are clean in the low 700's and has NO debt. I have to go on the loan as my income will lower the DTI. 

 

Current scores on MyFico 3B reports pulled on March 13: 548EQ/558/TU/568EX. My mortgage scores are reporting at 541EQ/609TU/555/EX

 

I have the following collections on my report: 

Comenity(TU/EX/EQ) - $751 Charge-off from Jan 2017 - settled for $469; account now reporting as paid and closed

BB&T(TU/EX/EQ) - $1,411 Charge off from 2011 - called and can settle for $705

Fair Collections & Outsourcing(EX/TU/EQ) - $1,668 Collection from 2011 - settled for $166.80; account now reporting with $0 and open

National Credit Systems(EX) - $4,161 collection from 2011; reporting on Experian only and can get early exclusion on May 29, 2017

DeVry(EX) - $1,300 Defaulted loan - applied for consolidation and amount will absolve into this and be deleted from Experian

Berks Credit (EX) - $545/$683/$724 - reporting on Experian only and can get early exclusion on July 29, 2017

 

Good Accounts:

Capital One - $500 secured platinum card since Apr 2016 - reporting balance of no more than $30 and this month will report at $0 balance

NFCU - $1,000 secured Visa since March 2017 - has not reported on credit report yet

Capital One - Authorized User on husbands account - he's had the card since June 2013 with $2,500 limit and current 18% utilization - not reporting on credit report yet

Westlake Financial - auto loan - reported as paid and closed since December 2016 - paid through vehicle trade-in

 

Is there anything that I can do to boost my scores? Any suggestions?


1. Do everything you can to get rid of the negatives. Send verification letters to the bureaus. Might accelerate some of them dropping off. Lexington Law provides this service for a fee.

2.  Maintain the credit cards with all but one reporting a zero balance, and the one card reporting a balance of 29% or less of the credit limit.

3.  No more late payments or chargeoffs. Every time you "settle" a debt you wind up with a huge credit negative.

4.  Don't apply for anything new. Applying for the NFCU card was a mistake.

 

Personally, if I were you, I'd look into cancelling this deal.

 

FICO8 EQ 725 TU 750 EX 717 Total revolving credit 443500
Frequent Contributor

Re: Mortgage Score/New Construction

Since the Comenity & FCO collections have updated on TU, my score jumped 24 points. With the exception of Comenity, all other debts are scheduled to fall off my report between August 2017-January 2018. And I'm able to do the early exclusion on Experian with most of them.

My lender advised me to get the NFCU card and to become an AU on my husbands CapOne card.

I haven't made late payments on any of my other accounts and don't intend to. I'm MUCH better about my credit than I used to be. When those collections/charge offs came on my report, I could care less about paying them back then.

We aren't cancelling the contract. I think my lender is being realistic in their requests, and if it couldn't be done I'm sure we wouldn't have received a pre-approval in order to put the contract on the house.

FICO8 Scores - 625TU / 640EQ / 649EX
On Mortgage Journey
Starting Mortgage Scores (Feb 17) 523EQ / 547TU / 564EX
Mortgage Scores Aug 17 624EQ / 649TU / 650 EX
Super Contributor

Re: Mortgage Score/New Construction


rookie08 wrote:
Since the Comenity & FCO collections have updated on TU, my score jumped 24 points. With the exception of Comenity, all other debts are scheduled to fall off my report between August 2017-January 2018. And I'm able to do the early exclusion on Experian with most of them.

My lender advised me to get the NFCU card and to become an AU on my husbands CapOne card.

I haven't made late payments on any of my other accounts and don't intend to. I'm MUCH better about my credit than I used to be. When those collections/charge offs came on my report, I could care less about paying them back then.

We aren't cancelling the contract. I think my lender is being realistic in their requests, and if it couldn't be done I'm sure we wouldn't have received a pre-approval in order to put the contract on the house.


It is a common mistake to assume that because the lender will give you the loan, therefore you can afford what you're getting yourself into.

 

 

FICO8 EQ 725 TU 750 EX 717 Total revolving credit 443500
Frequent Contributor

Re: Mortgage Score/New Construction


rookie08 wrote:

 Husbands scores are clean in the low 700's and has NO debt. 

 

Good Accounts:

Capital One - Authorized User on husbands account- he's had the card since June 2013 with $2,500 limit and current 18% utilization - not reporting on credit report yet

Westlake Financial - auto loan - reported as paid and closed since December 2016 - paid through vehicle trade-in

 

Is there anything that I can do to boost my scores? Any suggestions?

___________________________________________________________________________________________

 

Westlake that was paid off with a trade in and no new auto loan? 

Don't quite understand the zero debt and 18 percent current utilization on Cap One. Please clarify. 

 

 

Starting Score: 2/23/2017 Score 8 EQ 651 TU 659 EX 679
Current Score:10/23/2017 Score 8 EQ 738 TU 741 EX 740
Mortgage Scores 10/23/2017 EQ 751 TU 769 EX 751
Goal Score: 750+ ATB FICO 8, Middle Mortgage Score 760
Frequent Contributor

Re: Mortgage Score/New Construction

Yes. I traded in a vehicle and the one I have now is in my dads name, so I have no auto loan reporting now.

I meant to say he has no other debt besides 2 credit cards. CapOne is at 18% utilization and Discover is at 12% for him.
FICO8 Scores - 625TU / 640EQ / 649EX
On Mortgage Journey
Starting Mortgage Scores (Feb 17) 523EQ / 547TU / 564EX
Mortgage Scores Aug 17 624EQ / 649TU / 650 EX
Frequent Contributor

Re: Mortgage Score/New Construction

SouthJamaica, we can definitely afford the loan, so there's no "common mistake" there. As I've said all but one debt is from 2011, in which I was going through post partem depression, and unfortunately my credit suffered because I lost my job.

Fast forward to now, I am in a better position. We pay rent and other bills on time. It should also be noted that the mortgage payment is only a couple hundred more than the rent we've been paying on time for years.

I was looking for suggestions on how I can boost my score, not if we can afford the mortgage.
FICO8 Scores - 625TU / 640EQ / 649EX
On Mortgage Journey
Starting Mortgage Scores (Feb 17) 523EQ / 547TU / 564EX
Mortgage Scores Aug 17 624EQ / 649TU / 650 EX
Regular Contributor

Re: Mortgage Score/New Construction

I'm in the same boat as you with same scores but haven't tried for a loan yet. I settled on a collection account and the next thing I knew it was off my credit report, so now I have settled with portfolio recovery and paid a repo charge off (settled). You never know if they will come off but it will help by those not reporting every month as unpaid. I'm following this thread . I also thought it was so weird that people were lecturing you on whether you can afford a house. 

 

My financial situation has improved a lot as well, and we are looking to buy a house for about the same payment as our rental. 

 

Good luck!

Highlighted
Frequent Contributor

Re: Mortgage Score/New Construction

Thanks KS, I appreciate that.

MyFICO 8 scores on March 13 were 548 EQ/558 TU/568 EX.

Checked today and received an alert that they are now 575 EQ/558 TU/578 EX.

I'm hoping once my NFCU secured card and being the AU husbands card reports, I'll get another big jump.

My CapOne should update by Tuesday, and that shows a $0 minimum payment due April 2017, last statement balance -$11.54, and available balance of $501, which is also my limit.
FICO8 Scores - 625TU / 640EQ / 649EX
On Mortgage Journey
Starting Mortgage Scores (Feb 17) 523EQ / 547TU / 564EX
Mortgage Scores Aug 17 624EQ / 649TU / 650 EX