topic Re: Need Advice about Home loan in Mortgage Loans

Need Advice about Home loan

Anonymous — Thu, 10 Jan 2013 14:51:46 GMT

Hi Everyone,

I have a few questions that I hope I can get some guidance on. In the past year my wife and I have graduated college, moved to a different city, and found great jobs. We found a home plan we want to build and the builder has accepted the contract. When going through the loan process we found out that my wife's mid score was a 598 and mine was a 786. She had a collection that she did not know about, so we called the collection agency and paid it (They said they are going to remove it from her credit). She also had a late payment that was missed due to moving (Which we are in wait process to see if it is going to be removed). She also had a revolving credit, which just got paid off completely ( I did not know a revolving credit was bad). We are trying to get her credit above a 640. Total debts we have = $973. 2 of the notes are student loans and one is a car note. Would Consolidating the loans improve her credit? Also, is there anything we can do to improve her credit quickly? I know it will lower our Debt to income. Also, would opening a new credit card or charging and paying off items the same month improve it also. (In the short in Long run). We are trying to get preapproved so everything runs smooth. We close on the home Mid July. Any advice and guidance would help. Thanks in advance.

Side note: My lender wants me to pay that stuff off and run my credit in 30 days. I am effie about that and considering switching lenders.

Re: Need Advice about Home loan

Anonymous — Thu, 10 Jan 2013 14:55:23 GMT

Are you open to the possibility to getting a loan in only your name?

Re: Need Advice about Home loan

tooleman694 — Thu, 10 Jan 2013 15:02:33 GMT

If you cannot get that late payment off, you are about a year away from closing from when that 30 day late happened.

How many credit cards does your wife have.

Re: Need Advice about Home loan

Anonymous — Thu, 10 Jan 2013 15:14:00 GMT

I cannot get a loan in my name right now, due to the fact that they cannot count my commissions. She has 2 Credit cards. both are paid off. One CC had a balance of $700.00.

Re: Need Advice about Home loan

Anonymous — Thu, 10 Jan 2013 15:20:59 GMT

I would wait until the collection is removed, since the CA said they will remove from your credit reports. This may give you the boost you need, but sometimes can actually take points away from your score. Since you have several months before closing, you have a little time to work on her credit. Since collections are a major negative in FICO scoring, and according to what you have said is the only major negative on her reports, in my opinion it will give you the boost you need, but YMMV since the 30 day late is your newest negative reporting.

You can attempt a GW for the 30 day late, and you may have some good results, but GW's usually take time, and are not always granted. You need patience and persistence with GW's, but you have nothing to lose to try.

Consolidating student and or installment loans may also give you a small boost in her scores if it can lower her UTIL. Just do not add your revolving credit (credit cards) into the consolidation unless its absolutely necessary.

A small note... This is one of the reasons you get pre-qualified, pre-approved before making an offer or signing a contract to buy a home. Hopefully your contract reads something to the point of pending lender approval, with no expense to you. Signing a contract is a legal binding agreement.

Also as asked in earlier response if you are willing to apply on your own, you may qualify with-out your wife being on the loan agreement. If your DTI is good, your income is good for the amount of home you want to buy, you would be okay according to the score you posted if it is a FICO score.

Re: Need Advice about Home loan

Anonymous — Thu, 10 Jan 2013 15:28:25 GMT

We are in the process of a GW adjustment for the late payment. They said it will be 10 days and a letter by mail to find out. I am under no penalty for the home if lending falls through. I myself cannot qualify for lending on the home because they will not count my commissions, because I have only been on the job for less than 2 years. So it will take both of us on the loan to meet DTI.

Re: Need Advice about Home loan

Anonymous — Thu, 10 Jan 2013 15:47:31 GMT

Would consolidating student loans help Credit Score?

Re: Need Advice about Home loan

Anonymous — Thu, 10 Jan 2013 15:53:48 GMT

With her credit cards since she only has 2 cards, but you didnt mention her credit limits, the general rule of thumb in her situation would be to pay one card down to zero before statements hit and leave a small balance <9% on the other credit card to report on her statements.

But in my own experience I seem to get better results in the <1-3% range.

So in her situation and you wanting to obtain a mortgage this is what I would do.

I would sock draw 1 credit card! I would remove from draw once every 2-3 months and purchase something minimal. I would make sure when I usually get my statements for said card and pay off your purchase 1 week prior to statement hitting.

On the other credit card I would only use the card once between statements and just purchase $10 in gas. No more, no less. Once the statement hits and shows your balance of $10 then make the payment so no interest charges.

This will give you optimum scoring for your revolving credit. Now depending on your credit limit on your cards, you may be able to let higher amounts post to your statements, but if you stay on a consistent pattern on the very low end, you have better control and less chance of error.

Repeat this process until you have keys in your hand after closing for your home

Re: Need Advice about Home loan

Anonymous — Thu, 10 Jan 2013 16:07:32 GMT

Thank you for the advice. We are going to go with that game plan. I will keep you updated. Again thank you!