topic Re: Could We Possibly Qualify??? in Mortgage Loans

Could We Possibly Qualify???

divabrit32791 — Mon, 26 Nov 2012 03:11:03 GMT

My husband and I were just married earlier this month. We have been renting an apartment for the past year; our lease is up in February 2013, and we would like to purchase a home before/by then. We are located in the Fort Worth, Texas area. Our credit and income situation is as follows (haven't signed up on this site for our FICO scores yet, but looked at credit score from TransUnion on CreditKarma):

Me (score-691):

3 open accounts on credit (Credit card, student loan x2 $2500)

5 Late payments on credit card account (early summer 2010), in good standing since then

2 credit inquiries

credit history of 3yrs10mos

Him (score-629):

0 open accounts

1 account in collections ($2700)

Many late payments on 4 accounts now closed

3 credit inquiries

We have a combined monthly income of $4000, with my monthly student loan payments equaling $65. We make payments on his collection amount of $400 each month, but that will be paid off in May. I have an account with a collections agency for $9000 (monthly payments of $300), but was not added to my credit report. My first question is are those collections payments, including mine which isn't listed on my credit, included in determining our DTI? We will have $10,000 for a down payment, thanks to help from my husband's family. If we are looking at homes around $75,000, would it be remotely possible for us to qualify for a loan and close by our February deadline???

Re: Could We Possibly Qualify???

llecs — Mon, 26 Nov 2012 05:36:01 GMT

I'd focus on knowing your FICO scores first. One of the minimum scoring requirements for FICO is that you have to have at least one account reporting as open and updating for at least 6 months. In other words, your DH would not have a FICO score based on what you posted. Now you could add him as an AU to circumvent that. Some lenders tend to be wary. Others not.

The collections would probably have to be paid before approval. If not, the payments would have to be disclosed and that can factor into DTI.

Re: Could We Possibly Qualify???

divabrit32791 — Mon, 26 Nov 2012 14:01:15 GMT

I am going to go ahead and add him as an AU on my credit account. Checked my FICO this morning on here and it's a 703. I'm not as familiar with the FICO score system and how it works as far as qualifying, so what does that mean for my part at least?

Re: Could We Possibly Qualify???

llecs — Mon, 26 Nov 2012 14:38:34 GMT

703 is a good score. If you'd like to add DH to the loan and factor in his income, your lender will pull all 3 FICO scores for you and do the same for DH. They will take the middle score of the three for you and the middle score for your DH and take the lowest as consideration for your approval, your rates, etc. Ideally, you'd want to aim for a lower middle score of over 650, though you can get approved at less. Higher the better. I'd use this time to focus on repair and paying down balances and that'll improve your odds come app-time.