topic Re: Worried about mortgage approval... in Mortgage Loans

Worried about mortgage approval...

Anonymous — Sat, 07 Jan 2012 21:56:39 GMT

Long story short..We got pre approved about three months ago found a house went under contract passed the DU and then inspection fell through.. Went back to the drawing board found another house and now are under contract again..inspection has passed now just waiting on the bank.. HOWEVER..we recieved a phone call one day that our scores had dropped...didnt make any purchases or anything it just took us out of the FHA 620 Bracket...we are now at 610 and 601 for our middle scores our LO said he found a lender who still does scores that low...everything else is fine LTV DTI and nothing BAD on report...Whats the chances of denial now I have been waiting and only have until this friday for my mortgage contingiency on my contract....NERVOUS WRECK!!!

Re: Worried about mortgage approval...

StartingOver10 — Sat, 07 Jan 2012 23:13:48 GMT

I didn't see this post until after I answered your other one.

If your LO has another lender that will allow your 610 and 601 scores, then you should be ok.

Did you pull your reports to see what happened? Christmas utilization perhaps? If so, pay it down or off and have a rapid rescore done. There must have been some change to drop the middle score. Check to make sure something didn't land on your report that doesn't belong there....

@Anonymous wrote:
Long story short..We got pre approved about three months ago found a house went under contract passed the DU and then inspection fell through.. Went back to the drawing board found another house and now are under contract again..inspection has passed now just waiting on the bank.. HOWEVER..we received a phone call one day that our scores had dropped...didnt make any purchases or anything it just took us out of the FHA 620 Bracket...we are now at 610 and 601 for our middle scores our LO said he found a lender who still does scores that low...everything else is fine LTV DTI and nothing BAD on report...Whats the chances of denial now I have been waiting and only have until this Friday for my mortgage contingency on my contract....NERVOUS WRECK!!!

Re: Worried about mortgage approval...

Anonymous — Sat, 07 Jan 2012 23:22:25 GMT

Im assuming the high account on my cc is what happened.. He has submitted our application to the bank (which does do scores in that bracket) I am just totally thrown off by this because I do not want it to be the one reason I dont get approved as I have been renting for more then what my mortgage will be But im confused FHA will or wont secure a loan if its below 620?

Re: Worried about mortgage approval...

StartingOver10 — Sun, 08 Jan 2012 00:03:19 GMT

FHA sets minimum standards under which they will insure the loan. Each individual lender sets their own, higher standards to underwrite the loan. If you don't meet the lenders standards you don't get the loan with that particular lender.

It sounds like your mortgage broker has another lender in mind for you.

Can you pay down the utilization on that account?

Re: Worried about mortgage approval...

Booner72 — Sun, 08 Jan 2012 00:10:37 GMT

Your LO should have told you NOT to use your credit cards during this process.

There is a fix: Pay them down, have all report zero and one report a balance of 1-9% of it's limit for max points. Then get letters from each CC company indicating the new balances. Then your lender can send them to the CRA's to do what is called a "RAPID RESCORE". It costs money but the lender has to pay, as it makes or breaks the deal for the lender.

I was going to have to go w/ a subprime lender if I couldn't get to the 640 mark, i was sooo close, so we had a backup. But the back up would have been 1% higher interest and more in closing costs, at least 1K more. You will be happier for the next 30 years if you get yourself a decent mortgage - not a last ditch effort to save the house. I advise you do this RAPID RESCORE.

How much are you talking about? Can you do this? If you can't do this, then I'm wondering how you are going to be able to pay for your new bills such as maintenance and repairs, without the use of credit cards, thereby causing you to just increase your debt. Mortgage debt = Good. CC debt = BAD.

Are you going to watch Suze Orman's MONEY CLASS show that will be on tomorrow night on the Oprah chanell? If not, I strongly suggest that you do. You want to have your best foot forward in terms of financial decisions once you get to the point of owning a home. CC debt has taken away people's homes, they get under water and can't get out so they have to file BK or go into foreclosure etc.

BUT - if this was just simply not knowing that CC's can lower your scores, you were going to pay anyway, then I am very sorry for the lecture. People get lectured all the time around here. It's because we really care about each other and don't want people to make even more financial mistakes.

Good Luck!

Re: Worried about mortgage approval...

Anonymous — Sun, 08 Jan 2012 00:14:46 GMT

Yes I Did just yesterday but my LO already submitted the paperwork...He assures me we should be ok even with those scores but everything I read is saying otherwise that I will not be funded without atleast the 620...Its not that we have BAD credit we are 23 and 24 with only four years of credit...not a long history of it my loan officer says...I feel like this could go eitther way and its making me very uneasy.....

Re: Worried about mortgage approval...

Anonymous — Sun, 08 Jan 2012 00:19:47 GMT

It was only 400 dollars and I do have money saved but My LO said (after the fact) that putting 400 dollars on a 750 credit limit is going to plunge the score....

Re: Worried about mortgage approval...

StartingOver10 — Sun, 08 Jan 2012 00:40:39 GMT

@Anonymous wrote:
It was only 400 dollars and I do have money saved but My LO said (after the fact) that putting 400 dollars on a 750 credit limit is going to plunge the score....

Did he mean paying off the $400 balance or charging $400 on a $750 credit line?

What cards and limits do you have?

Re: Worried about mortgage approval...

Anonymous — Sun, 08 Jan 2012 00:51:21 GMT

I have a capital one for 750 and during christmas I charged 400 dollars to its and it already had 180 on it so basically having 580 on a 750 was bringing me down..I also have a car loan for 22000 and another cc with 190 w a 500 limit. But ive never had a late.. my husband had some 3 or 4 late payments but it was from 4 years ago...and since we are going FHA we were told 12 months good was acceptable. This whole process is a lot to swallow I clearly had no idea what I was getting myself into.

Re: Worried about mortgage approval...

StartingOver10 — Sun, 08 Jan 2012 01:01:52 GMT

Pay off the balances now.

Then have your LO do a rapid rescore after the new balances report.

When are you supposed to close?

Re: Worried about mortgage approval...

Anonymous — Sun, 08 Jan 2012 01:10:06 GMT

January 27th and My contract has a mortgage contingiency for this Friday... I am worried I wont hear from the bank at all this week and then I really dont know what to do...I dont want to loose my down payment and the house over my score dropping. My LO said we should hear something by monday, Im hoping hes right.

Re: Worried about mortgage approval...

Anonymous — Sun, 08 Jan 2012 01:30:08 GMT

I agree with the last comment, because i went charge crazy and brought my utilization above 90% which in returned brought my scores down 47 points. I paid down my balances and my credit score rebounded immediately by 51 points. If you could pay your balance before the closing date so that it will report to the CRA. Then follow through with a call to the creditor to make sure that are reporting as soon as possible because some times they dont always report monthly.

Congratulations

Germaine47

Re: Worried about mortgage approval...

Anonymous — Sun, 08 Jan 2012 01:33:52 GMT

Thanks!! but my file is already under review with the lower scores so would that even do me any good?

Re: Worried about mortgage approval...

Anonymous — Sun, 08 Jan 2012 19:39:32 GMT

If your file is under review no it want help.

Re: Worried about mortgage approval...

Anonymous — Mon, 09 Jan 2012 01:33:46 GMT

Well we still meet lenders requirements for the fico just worried about the interest rate im sure thats going to change...