topic Re: Length of credit history required for mortgage? in Mortgage Loans

Length of credit history required for mortgage?

Anonymous — Thu, 04 Aug 2016 04:12:02 GMT

I recently started building my credit after a long hiatus due to bankruptcy. I didn't realize I could still have anything to do with credit with the bankruptcy so I lived on a cash basis for the past 7+ years. Then I found this forum approximately 8 months ago and went to work. I now have several CC, a couple of secured credit builder loans, and a new truck loan. My Fico8 scores are 726, 733, and 736 and my mortgage scores are 706,707,711. I only have a little over 6 months history. I'm just wondering at what point can I actually think about a mortgage?

Re: Length of credit history required for mortgage?

echoecho — Thu, 04 Aug 2016 04:32:25 GMT

I think someone mentioned some lenders will go with one year but most say at least 2 years history. With your scores it could just be a waiting game plus saving the down paymen/closing cost.

Re: Length of credit history required for mortgage?

StartingOver10 — Thu, 04 Aug 2016 09:59:14 GMT

I just had a client that experienced the exact same thing: Bk in 2011 and no credit since the Bk. When the lender pulled his scores he had none since he never rebuilt. The client immediately picked up a Cap 1 card and one other (don't know which) and had a score within 45 days. The lender then received an approve/eligible on the app and we are closing Sept 1.

Asking the lender about this he said that as long as he received the automated approval he was good to go and didn't have to show two years of credit usage at all. It may vary by lender.

Re: Length of credit history required for mortgage?

Anonymous — Thu, 04 Aug 2016 14:43:54 GMT

Correct me if I'm wrong, but in order to generate a score in 45 days you must have prior credit history, otherwise it takes 6 months. I have a clean slate, zero negatives, and zero positives except for the last 7 months.

Re: Length of credit history required for mortgage?

DallasLoanGuy — Thu, 04 Aug 2016 14:50:36 GMT

most lenders consider the trade lines valid after 12 months history reported.

most lenders also want 3 trades. auto + 2 cc is the usual minimum

Re: Length of credit history required for mortgage?

echoecho — Thu, 04 Aug 2016 14:56:00 GMT

I read here that at times lenders don't just use fico scores but other alternative. MAYBE with 45 day history plus other alternative scoring qualified this client for the lender to take the risk. It's thier money , idk.

Re: Length of credit history required for mortgage?

Anonymous — Thu, 04 Aug 2016 17:16:57 GMT

I am supposed to close on a house in 3 weeks. I starting rebuilding in February of this year after identity theft. Besides negative accounts, all I had was a rehabbed student loan. In that 6 months I had gotten 2 car loans, 4 CCs and 2 LOCs. My scores went from 400s to low 700s.

The only time I have had a lender mention the age of my tradelines was when I was trying to go USDA. They want either seasoned tradelines of 12 months or more, or alternate tradelines such as rent or utilities. My current lender is NFCU (they do 100% down programs with no PMI if you are military, discharged, or affiliated/reserves) and they don't seem to care at all that my credit is new. I guess the new credit might be offset by a large salary and dependable job history, as well as my student loans showing pristine history.

Every lender and every file will be different. If you have all new credit, 3 months on the job and are pushing your DTI to 45% you will probably have an issue.