topic Re: Preparing for Mortgage - Need Help/Advice in Mortgage Loans

Preparing for Mortgage - Need Help/Advice

Anonymous — Sun, 12 Oct 2014 12:07:53 GMT

So I started seriously repairing our credit in August of this year. With the help of this site and the great people on here I have had much luck in getting multiple baddies removed. Below are our current scores and the increases. We live in Texas and are continuing to pay down our utilization on current credit cards while waiting for our scores to increase. We plan on going the USDA guranteed route (Family of 5 - Income $75,000). We qualify for income and with the area we live in. We are trying to see when would be the best time to try. My current goal is March and to close in June. So those who are experienced with USDA - any suggestions or advice for the info below?

The most current scores are:

Mine:

Based on10/07/2014 Equifax data-600 (July – 562) +38

Based on10/08/2014 TransUnion data- 621 (September – 619) +2

Based on10/06/2014 Experian data- 682 (September – 589) +93

Husband:

Based on 10/11/2014 Equifax data- 645 (August 1 – 602) + 43

Based on 10/11/2014 TransUnion data -633

Based on 10/11/2014 Experian data – 670

Of course the numbers are from the MyFico site and not the scores a mortgage lender would pull. We had those pulled in July when we realized just how screwed up our credit reports were. I had been paying off things and not getting them deleted. Big mistake!! However I have been able to correct all of those. We do have our scores from the Equifax site (DH) - 585 (ME) - 575. We have multiple positive tradelines that have been closed showing on the reports. I have been able to clear up the negative accounts except for the ones listed below. Credit simulators give us a huge boost of course if we get our credit utilization paid down.

Loans:

We have two car loans - current - no lates. Car Loans: $344, $677. High percentage rates on those. First Question: To help our Debt to income ratio - would we try to refinance the highest one first before applying for mortgage? And if yes - how long do we have to wait to apply for mortgage after refinancing?

Credit Cards:

Capital One - (mine) (husband AU) $300 CL - Paid down to $149 - Only one late from April 2012. Have attempted to goodwill and no luck.

Capital One - (Husband) (Me - AU) $1500 - Bal: $705 - no lates

Capital One - (Husband) (Me - AU) $750 - Bal: $603.00 (Three lates from 2012 - have tried to get removed) - Should I remove myself as an AU on this account?

Credit One - (Husband) (Me - AU) $550 - Bal: $412 - No lates

Credit Union - (husband) - $1000 - Bal $650 - No lates

Fingerhut - (husband) - $2000 - Bal $1500 - no lates

Student Loans - Husband and I both have multiple loans. Mine are all current and we are in an IBR program. Payments are $40 a month ea. Husband's are all current except for 4 (we thought they were under the same grace period when he graduated, however they were 20 years old - grace period had been used when he first left college almost 20 years ago).

Small Loan $2000 - owe $515 - Will be paid off in January.

I know our credit utilization is high. Have budgeted to pay them all off or below 10% by January 2015.

Baddies left:

Two medical bills (one mine, one DH)- $75 each - They have agreed to PFD - doing that in November.

Walmart (MINE)- charge off 2012- I have a complaint with BBB about this account - Zero balance and has been settled with PRA.

Capital One - paid closed account - multiple lates - card stolen - have tried to goodwill but no luck - Lates were in 2012 - finally set up monthly payments and PIF then closed account.

First Premier (MINE)- $444 - charge off - they own - Have been trying for PFD but they are not budging. Going to call and try one more time and then pay in full.

First Savings - $607 Charged off - Zero balance - settled with CA - from 2009

Thanks for any help or advice!!!!!

Re: Preparing for Mortgage - Need Help/Advice

StartingOver10 — Sun, 12 Oct 2014 13:05:19 GMT

I am addressing the refi of your auto loans: yes, if you can reduce the payment, then refi the auto loans, especially the very high one.

Refi through a CU so you only get one inq rather than a bunch. Are you upside down on the auto loans? Look in the auto loan section here in MyFICO for suggestions

When you go for your mortgage the lender will probably just require a letter of explanation for the refi.

Re: Preparing for Mortgage - Need Help/Advice

Anonymous — Sun, 12 Oct 2014 23:25:38 GMT

It's just scary to try for new loans, mortgages or even refinancing. Our credit scores have been so low for the past few years and it's hard to believe we may can actually do this. I thin. We are going to move ahead with a loan officer to finish or even know how far say we are.

Re: Preparing for Mortgage - Need Help/Advice

TimeToRecover — Sun, 12 Oct 2014 23:35:11 GMT

Credit Cards:

Capital One - (mine) (husband AU) $300 CL - Paid down to $149 - Only one late from April 2012. Have attempted to goodwill and no luck.

Capital One - (Husband) (Me - AU) $1500 - Bal: $705 - no lates

Capital One - (Husband) (Me - AU) $750 - Bal: $603.00 (Three lates from 2012 - have tried to get removed) - Should I remove myself as an AU on this account?

Credit One - (Husband) (Me - AU) $550 - Bal: $412 - No lates

Credit Union - (husband) - $1000 - Bal $650 - No lates

Fingerhut - (husband) - $2000 - Bal $1500 - no lates

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I don't know much about usda but you will want your credit score to be as good as possible and with these balances your utilization will be thru the roof. If you keep all of your AU you are at 4019 out of 6100 which is 65%. Not to mention the payments on each of these will couny in your DTI ratios. Even if you droped the 3 on which you are an AU on you would be at 2299 out of 3300 which is 69%. If you are working with a good LO they should be able to use their simulator after they pull your reports to tell you what you can do to raise your score and get to the point you need/want to be to get a loan.

Re: Preparing for Mortgage - Need Help/Advice

Anonymous — Mon, 13 Oct 2014 00:48:14 GMT

As far as far as the utilization goes we will be paying all of the balances down in December and January to zero except for one of them. USDA requires a mid core of 640. Some will do a 620 but we are trying to go for at least 640. The smallinstallment loan will be paid off in January also.

Re: Preparing for Mortgage - Need Help/Advice

ezdriver — Mon, 13 Oct 2014 17:03:52 GMT

My recommendations are:

1) Focus on geeting rid of baddies [if you can] from your credit reports.

2) Replace those AUs with revolving credit cards.

3) Ensure a min of 12 months ontime payment history to develop.

4) Get utilization on revolving tradelines to zero on all but one ... and 3% of less on the last one.

5) Have a loan officer pull your trimerge report so that you can have a real set of scores. Don't waste your timeor energy on any scores not pulled by a lender.

Good luck with your rebuilding efforts.