topic Re: Lady Scarlet or Shane in Mortgage Loans

Lady Scarlet or Shane

fishbjc — Tue, 15 Jan 2008 15:01:39 GMT

Helping a friend begin to look at houses. She found a new build that she likes. Here is her situation:

Scores 556, 555, 610...soon to go up as she is really knocking down debt at a quick clip.

Her down payment is 100,000

Purchase Price Approximately 280,000

DTI Ration about 23%

Income $99,000

~~~~~~~~~~She's really nervous, I'd say her mortgage chances are pretty good, especially if she gets those scores into mid 600's~~~~~~~~~~~~~~ do you agree?

Re: Lady Scarlet or Shane

ShanetheMortgageMan — Thu, 17 Jan 2008 04:25:52 GMT

Her debt ratio & down payment are in check... it would just be a matter of what the issues are which is bringing down her credit scores.

Re: Lady Scarlet or Shane

fishbjc — Thu, 17 Jan 2008 15:18:19 GMT

Shane, it's actually debt. She only has about $10k in available credit and owes approx $9k, mainly due to rehabbing the home she's in. She bought a lemon, lol.

She has no collections, no charge offs, no bk, two recent baddies.

She's taken on a p/t job as a waitress and has already knocked $1k off in the past two months. She figures by May she should be down around 4k, which should be fine.

Re: Lady Scarlet or Shane

fishbjc — Thu, 17 Jan 2008 15:19:32 GMT

And I should note that this house she bought has cost her almost $50 in rehabbing in 3 years. It's sucking the life out of her. Plus she has a daughter in college...

Re: Lady Scarlet or Shane

Anonymous — Thu, 17 Jan 2008 16:34:40 GMT

what are the 2 recent baddies? Can these be GW'd?

With almost a 36% downpayment (even "I" could get the seller to pay all closing costs right now) - and her scores on the rise (get that dbt down!) - shouldn't be problematic at all....

Re: Lady Scarlet or Shane

sunrise — Thu, 17 Jan 2008 21:04:58 GMT

Why is she so in debt? If she has 100,000 for a down pymnt? Did I miss something?

Are you saying when she sells the home she's in now that there is 100,000 in equity?

Re: Lady Scarlet or Shane

fishbjc — Fri, 18 Jan 2008 00:39:08 GMT

Yes sunrise, she's got a min of 100k, but if the house sells well do the rehab she SHOULD walk with 130K, but you never know what's happening in this market.

She's not that far in debt, less than 10k, but because she's high on util, her scores are down.

Re: Lady Scarlet or Shane

sunrise — Fri, 18 Jan 2008 00:52:19 GMT

Ahhhh, now I'm on the same page! Tell her to keep chipin' away at them cards, her scores will go up!!

Re: Lady Scarlet or Shane

ShanetheMortgageMan — Sat, 19 Jan 2008 20:38:10 GMT

fishbjc wrote:
Yes sunrise, she's got a min of 100k, but if the house sells well do the rehab she SHOULD walk with 130K, but you never know what's happening in this market.

She's not that far in debt, less than 10k, but because she's high on util, her scores are down.

Upon the sale of her home, she could use the proceeds to pay off the credit card debt, have the mortgage broker do a rapid rescore to get her scores updated within a matter of days, and bring her scores up higher... I have a feeling that it might be more than just high credit card utilization that is bringing her scores down though. Usually someone doesn't get 550'ish scores just because of high credit card utilization, there is normally some underlying condition such as was late on payments, or some collections or a BK in the past.

Re: Lady Scarlet or Shane

fishbjc — Sat, 19 Jan 2008 22:51:52 GMT

I sat down with her myself and looked over her fico. I was wondering if her ex pulled anything she wasn't aware of.

She is an authorized user on two of his accounts that has a really awful payment history. Nothing recent though, these were several 30 day lates four-six months ago. Since he's re-employed he's kept up. She has no bk and no collections on any of the three.

I think she should get herself off as au on his two cards. I deleted dh from two of my cards & his score took a nice jump.

Re: Lady Scarlet or Shane

fishbjc — Sat, 19 Jan 2008 22:53:56 GMT

She also revisited the new builds & they've added a new two bedroom model. With all the upgrades she can dream up, it's about 240k, so with a 100k down, she should be ok in six months as long as she can sell the current monster.

Re: Lady Scarlet or Shane

ShanetheMortgageMan — Sat, 19 Jan 2008 23:07:44 GMT

fishbjc wrote:
I sat down with her myself and looked over her fico. I was wondering if her ex pulled anything she wasn't aware of.

She is an authorized user on two of his accounts that has a really awful payment history. Nothing recent though, these were several 30 day lates four-six months ago. Since he's re-employed he's kept up. She has no bk and no collections on any of the three.

I think she should get herself off as au on his two cards. I deleted dh from two of my cards & his score took a nice jump.

I figured it was something like that... anything in the past 12 months is considered "recent", and anything in the past 24 months will have a greater impact on credit scores. I agree with you, she would have a much better chance of qualifying if she can remove herself as an AU from her husbands credit cards, and I'm sure her credit score would jump up too. If I was her I'd look into doing that next week, better to find out early and be prepared than to wait until the last second.

Re: Lady Scarlet or Shane

ShanetheMortgageMan — Sat, 19 Jan 2008 23:10:04 GMT

2-bedrooms are nice if it's going to be the home she'd be in forever... however the resale value on 2-bedroom home is usually less because it's less appealing to families, which often look at 3 or more bedroom homes, and families make up the majority of homebuyers from my experience. Not sure what her plans are, but if it's to sell at some point in the future, it's something she should consider.