topic Re: Don't get your hopes up... in Mortgage Loans

Don't get your hopes up...

firemartinez1980 — Tue, 02 Jun 2020 20:25:00 GMT

After much reading on here, My Wife and I decided it was time to apply for a VA Loan today....

I have been working on my credit over the past 2 years and I have paid off all my debt besides my auto loan, haven't missed any payments, don't have any collections, etc....My FICO score is 650 so I thought for a VA Loan everything would be good to go!!

Applied at 4 different lenders today and after a few hours....DENIED by all of them.

My Middle score is 631 for Mortgate Scores and apparently ALL lenders now require 640 or above and some 660. It's a tough smack in the face!! Just 6-8 months ago people were getting loans with credit around 580-590, yet now I am apparently 9 points away and cannot get anything.

I have paid all my debt, made all payments on time, etc and there is Nothing else I can do to bring my score up besides WAIT and keep paying bills on time.....This was basically told to me from all lenders today

UUUGGGGHHHHH!!!!!!

Re: Don't get your hopes up...

Anonymous — Tue, 02 Jun 2020 21:09:45 GMT

What's your utilization on your credit cards? Have you heard of AZEO? Crossing thresholds on utilization really does help your scores. Mortgage score models (FICO 2, 4, abs 5) in particular love low utilization and zero balances in my experience.

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 01:00:28 GMT

https://www.rocketmortgage.com/

Apply there, they are extremely leinet when it comes to approvals. I was in the same boat as you, 640-650 mid + 2 yr post bankruptcy, but QL approved me for a 2.99% rate VA loan. I was denied by about 10 other banks, so they are a godsend. I close next week.

Hope you get approved, vet.

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 01:33:02 GMT

Do you have a car loan or any other recent loan?

Would something like self lender help him?

Not sure but thinking the mortgage scores may just benefit from adding a loan and paying down 35% of it.

Re: Don't get your hopes up...

CreditFun — Wed, 03 Jun 2020 01:56:31 GMT

You need a mortgage broker.

There are 100s of wholesale lenders that a broker can chose from.

The key is finding a broker that has relatinships with multiple lenders.

Now that you know your middle score, you don't need to pull your credit.

Call around to brokers, explain your situation and see if they have a program that matches what you are looking for.

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 02:14:25 GMT

@Anonymous wrote:
What's your utilization on your credit cards? Have you heard of AZEO? Crossing thresholds on utilization really does help your scores. Mortgage score models (FICO 2, 4, abs 5) in particular love low utilization and zero balances in my experience.

Utilization didnt move my Fico mortgage Score even 1 point. (im on a thick/clean/aged scorecard)

I went from 7 cards reporting a balnce to 4 cards reporting a balance. my aggregate Util passed the 28.9% threshold. I had one bank card cross 68.9, 48.9, 28.9, and 8.9 (is now 0 balance) and a second pass 48.9, 28.9, 8.9 and is now zero. My fico 8/auto/bankcard scores all saw 30+ points improvement. my fico 2 didnt move 1 point.

AZEO with the 1 card under 8.9% seems to matter most. and having installment loans paid way down

Re: Don't get your hopes up...

firemartinez1980 — Wed, 03 Jun 2020 12:57:24 GMT

I have 1 credit card with a $1200 limit and the balance is around $30 that I pay always on time. Only other loan/debt I have is an Auto loan opened July 2019 and all payments made on time.

Point is, everywhere I applied requires 640 VA Loan.... Not 620, Not 639.....640

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 13:01:46 GMT

You said no missed payments and no collections, but something must be amiss for your scores to be stuck where they are. What derogs do you have reporting?

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 13:07:13 GMT

I am not a credit expert by any means, but I do read these forums quite a bit and I stayed at a Holiday Inn Express last night. I have read that for maximum Fico scoring you want to have 3 bank credit cards. i.e. cap1, bofa, chase. Not store finance cards like ashley furniture or whatever. You can have that, but that isn't the "3." Someone can correct me if I am wrong, but one card, with a relatively low limit probably is holding you back as well.

Re: Don't get your hopes up...

dynamicvb — Wed, 03 Jun 2020 13:34:47 GMT

Mortgage scores are sensitive to the number of revolvers reporting. If you can get a couple more of those cards to report zero, ideally only one reporting a balance then it should give you a bump. VA has always required at least 640 to my knowledge. FHA would let you qualify with a 580, but not sure if that is still the case with this current environment.

Mortgage scores also hate collections even if they are under a 100 bucks and paid. I have one paid collection on my EQ and my mortgage score on it is 50 points lower than the other two. If you can goodwill any of those and get them removed. If you have them, then it should be good for a few points although you may not see anything in this area while any collections or charge offs remain as its usually the last one gone that produces a decent gain.

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 14:44:42 GMT

I feel ya I just applied for a USDA direct and am praying we are approved because I don't know what else to do. We have been working on it a few years and I really want to give up because it just seems impossible. I am going to keep pushing tho and I hope you do the same I'll be praying for you.

Re: Don't get your hopes up...

firemartinez1980 — Wed, 03 Jun 2020 15:07:42 GMT

I have NO collections, NO late payments, No debt besides my auto loan and one small credit card.

2 years ago I had credit in the 550 Range with a collection and over $4000 in debt, but I have since taken care of all of that and brought my FICO 8 score up to 645 currently, however now, no matter what I do, my score is STUCK!!!

The only thing I have been told by everyone is "Just pay bills on time and it will eventually go up".....Well I am still waiting.

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 18:00:48 GMT

An auto loan and one credit card with a $1200 limit. With presumably history going back 2 years, hopefully not less. That's an issue right there - your credit is limited. Who's the lender for the credit card that you have?

Re: Don't get your hopes up...

VALoanMaster — Wed, 03 Jun 2020 18:07:51 GMT

@firemartinez1980 wrote:
After much reading on here, My Wife and I decided it was time to apply for a VA Loan today....

I have been working on my credit over the past 2 years and I have paid off all my debt besides my auto loan, haven't missed any payments, don't have any collections, etc....My FICO score is 650 so I thought for a VA Loan everything would be good to go!!

Applied at 4 different lenders today and after a few hours....DENIED by all of them.

My Middle score is 631 for Mortgate Scores and apparently ALL lenders now require 640 or above and some 660. It's a tough smack in the face!! Just 6-8 months ago people were getting loans with credit around 580-590, yet now I am apparently 9 points away and cannot get anything.

I have paid all my debt, made all payments on time, etc and there is Nothing else I can do to bring my score up besides WAIT and keep paying bills on time.....This was basically told to me from all lenders today

UUUGGGGHHHHH!!!!!!

Did you apply with any of us on the board?

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 19:06:52 GMT

@firemartinez1980 wrote:
I have NO collections, NO late payments, No debt besides my auto loan and one small credit card.

2 years ago I had credit in the 550 Range with a collection and over $4000 in debt, but I have since taken care of all of that and brought my FICO 8 score up to 645 currently, however now, no matter what I do, my score is STUCK!!!

The only thing I have been told by everyone is "Just pay bills on time and it will eventually go up".....Well I am still waiting.

has this collection fallen off of your credit?

Re: Don't get your hopes up...

Anonymous — Wed, 03 Jun 2020 19:28:21 GMT

I would wait until its over 700 op

Re: Don't get your hopes up...

Anonymous — Thu, 04 Jun 2020 10:57:57 GMT

Your other threads indicate that you had 30 and 60 day lates on your credit card in Jan and Feb of this year, a charge off that re-emerged last month, and a collection in Aug of 2019. Have you resolved the lates, collection and charge off? Are they still reporting on your CR? Those very recent derogatory items if still present, surely affected your pre-approvals. Also, if you have your mortgage FICO scores that will provide more info than your FICO 8. There are people here who can help if you are willing to give a full picture of your situation.

Re: Don't get your hopes up...

jhb — Thu, 04 Jun 2020 11:30:20 GMT

Your initial post states that you have no lates, and you have payed all of your debt. If this was the case, your scores would be much better. It doesn't add up. So, I looked back on your previous posts, and noticed that you do have lates reported as early as this year. This would definitely be a huge reason for your low scores.

Re: Don't get your hopes up...

firemartinez1980 — Thu, 04 Jun 2020 13:22:12 GMT

My Credit reported a 30 and 60 day late which was killing my credit, however after talking with the credit card company, ALL lates were deleted from my credit and that card balance was paid in full.

Luckily my score has jumped now from a 631 FICO 2 and is now a 680 with that removed!!

However, my main point was the fact that 640 is the MINIMUM score for VA Loans with some places even requiring a 660.

Re: Don't get your hopes up...

Anonymous — Thu, 04 Jun 2020 17:10:19 GMT

@firemartinez1980 wrote:
I have NO collections, NO late payments, No debt besides my auto loan and one small credit card.

2 years ago I had credit in the 550 Range with a collection and over $4000 in debt, but I have since taken care of all of that and brought my FICO 8 score up to 645 currently, however now, no matter what I do, my score is STUCK!!!

The only thing I have been told by everyone is "Just pay bills on time and it will eventually go up".....Well I am still waiting.

You state you had a collection as recent as two years agao, does that mean you askd for a PFD with the Creditor? Because if not, a paid collection would still be reporting. Score increases don't happen overnight, once those negatives are removed it takes time to get into a new scoring bucket. This is what you might be experiencing, and there is a whole topic on different scoring buckets.