topic Re: Is it worth it to try for preapproval? in Mortgage Loans

Is it worth it to try for preapproval?

Anonymous — Sat, 08 Aug 2020 20:45:47 GMT

After five years of trying we have finally gotten middle mortgage score to 639. As we were told two years ago that due to a large amount of student loan debt our best bet was to try for conventional not FHA financing. We have about 15k to put down hoping to buy for 190,000 or less. Probably more like the 160k range knowing our area. We have no lates over the last three years and an average he of credit of 16 years. Good income and 17 years at the same job. Lots of student loans and a two unpaid medical collections from years ago. We’ve been turned down so many times, so much heartbreak. Including four years ago when we got prequalified for FHA and then turned down because of the dti other the student loans. Is it even worth it to try again right now ? I don’t know how many more times I can leave a mortgage office heartbroken.

For credit profile we have five cards all at 0-3% usage. A car loan for $350 a month always paid on time for four years now , and about 75k in student loans all on income based repayment all paid - the last negative on the file was when a student loan forbearance messed up and seven nelnet accounts posted as 90 days late one month three years ago this fall.

Re: Is it worth it to try for preapproval?

newmomnewme — Sun, 09 Aug 2020 15:32:17 GMT

The real experts will chime in soon!

Since all five of your cc are sitting at 0-3% UTIL, I suggest that you try AZEO if you can....wait for your payments to report and watch your scores go up!

I was pre-approved by a local credit union and big box bank with a 638 middle score about three weeks ago. I was told that a 640 mid would lower the rate and PMI!

11/12 of my revolvers carried balances and overall UTIL was 90% and I had 1 30 day late that hit the 24-month mark and boom, my mid score went up to 649. Now, I am shooting for 700 by paying off half the revolving debt and leaving 2/12 basically maxed. In the next 3-4 months, I'll be working towards AZEO and get rescored by both since scores are only good for 90 or 120 days based on lender.

Yes, I am taking a chance by draining my savings/down payment but with better scores and time, I will be in a better position to purchase and get a good deal.

I know you can do the same!!!!

Re: Is it worth it to try for preapproval?

Anonymous — Mon, 10 Aug 2020 03:09:14 GMT

Thanks, I was just wondering if it was really worth it to apply - I want to - badly but I just dont want ot get burned again. We have been AZEO before and it seems like the best scores come at random few dollar reportings - i hate how much of a game credit scoring is in general.

Re: Is it worth it to try for preapproval?

Anonymous — Mon, 10 Aug 2020 08:35:58 GMT

I am far from an expert but, for those who are, what is your income or dti? Your post includes your debt but not your income.

Re: Is it worth it to try for preapproval?

Anonymous — Mon, 10 Aug 2020 09:29:49 GMT

Do you have a relationship with a local bank/CU where you can go to talk about your options? Are you looking to go conventional this time or FHA again? Knowing how you DTI will be calculated will be helpful under the scenarios will help. I would expect that getting those collections settled or PIF would help as well.

Re: Is it worth it to try for preapproval?

Mortgage-Specialist — Mon, 10 Aug 2020 11:27:23 GMT

Re: Is it worth it to try for preapproval?

Mortgage-Specialist — Mon, 10 Aug 2020 11:28:03 GMT

Yes its definitely time to apply

Re: Is it worth it to try for preapproval?

Anonymous — Mon, 10 Aug 2020 15:52:15 GMT

Going for whatever we can be approved for really. An income of roughly 120,000 annually. The last few medical collections total $280 but they won’t pay for delete no matter what I do it seems I could easily just pay in full but not sure if it would hurt axle

Re: Is it worth it to try for preapproval?

newmomnewme — Mon, 10 Aug 2020 21:39:16 GMT

@Anonymous Go for it! I suggest 2-3 lenders so you can compare offers.

Re: Is it worth it to try for preapproval?

Mortgage-Specialist — Tue, 11 Aug 2020 15:40:44 GMT

A loan officer needs to run a credit simulator which will tell you in advance how paying off those collections will impact your score.

Re: Is it worth it to try for preapproval?

Citylights18 — Wed, 12 Aug 2020 05:35:57 GMT

@newmomnewme wrote:
@Anonymous Go for it! I suggest 2-3 lenders so you can compare offers.

If you do that its 2-3 hard pulls to the credit file.

Talk around to different lenders and ask what their DTI limits are. Multiply your montly income by the DTI rate (e.g. 40% become 0.4) and that is the total obligation they'll allow you to handle. Current rates will normally be posted in their web page. Take the total obligation and subtract the non-mortgage obligations and that will be the total mortgage obligation (mortgage, taxes, HOA). Figure roughly 25% of the taxes will go to mortgage/HOA.

You can reverse engineer the mortgage payment you'll qualify for then with that rate determine what the mortgage amount would be. Most banks have their own calculators to play with.

Re: Is it worth it to try for preapproval?

newmomnewme — Wed, 12 Aug 2020 08:43:29 GMT

@Citylights18 if the applications are done within 14-45 days they count as one inquiry right? Since consumers are expected to "shop" around for large purchases?

Same with auto loans I think.

Re: Is it worth it to try for preapproval?

Anonymous — Sun, 23 Aug 2020 17:58:23 GMT

Update.

We were here successfully pre approved for 200k and are actually putting an offer in on a house Monday ! Fingers crossed it’s smooth sailing from here