new college grad needs some navigation.......

Anonymous · ‎01-06-2009

hello friends, i am a recent college grad who was lucky enough to land a 100K+ job in the healthcare industry. unfortunately this fine education i needed ended up costing me close to 90K in student loans currently at 4.8% interest. i also managed to destroy my credit in the early years (2000-2004) of college and have several collections totalling about $2500, i have paid some of them off. i have only one cc which has a low balance and i have been paying regularly.

my question is regarding home ownership, i am currently on track to save roughly 60k by 2011 (although i may have to borrow about 20k from 401k) to be able to finance a nice 300k home for my family. my current ficos are tu:620, eq: 607, ex: 598, and the simulator projects that i can acheive a score of roughly 700 if i pay my bills on time for the next 24 months. do you think i am being too conservative thinking i will need a full 20% down to get a decent rate or will i be able to negotiate less than 8% based on my income alone....i really dont want to pay for PMI but i would like to get this tax write off sooner than later..... should i jump in sooner or wait to save 20% and increase my fico scores.... any expertise would be greatly appreciated

Chopbrocoli · ‎01-06-2009

In this economic climate and especially for your situation, I'm pretty sure income alone will not suffice. You are going to need to show the lender that you have a low debt to income ratio, 20% down for the house, and great FICO's to have a good rate.

I would start DV'ing the collections and doing a PFD. Are the collection accounts your only baddies?

Anonymous · ‎01-06-2009

thanks for the response, for the most part my collections are the only baddies, i did have 1 30 day late payment on a cc back in 7-07, but thats it. can you explain to me how PFD works? i appreciate the responses...

Chopbrocoli · ‎01-06-2009

Not a problem. A PFD is a pay for delete. Some CA's will usually request a pay in full for the deletion of the collection account from the credit report. Here is an exaple of a PFD at: http://ficoforums.myfico.com/fico/board/message?message.uid=4519#U4519

As for your 30 days late, you can also send a good will letter to your creditor. Heres an example letter at: http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=2661

Just curious, did you get out of undergrad or MBA for the healthcare position? Congrats on the new job!