topic Re: How hard is it going to be? in Mortgage Loans

How hard is it going to be?

Anonymous — Sun, 01 Apr 2012 23:33:41 GMT

I am hoping to buy a home in the summer. We, DH and I have challenging credit, with his scores in the low 580's to 590's. mine are just a bit lower, TU today was 581, Ex 553 and exp 595. He has excellent employment history and I have had two jobs in four years, and have been at this job for 11 months... I have been actively working at getting collections removed, and will have that taken care of this month on my credit. Last April a landlord sued me and won for damages (she has sued every tenant she has ever had and wins every time but I didn't know this when I rented), it is marked as paid last April as well. I have a charge off that was settled and I have that paid off as of March21st after making monthly payments for one year. The collection company said it would show up on my credit as paid and a zero balance very soon. I have not made any late payments in 15 months, with my last payments late on a payday loan and they will not go for a GW deletion, though I have mailed the CEO directly s hoping that will get me somewhere. Annual income is about $100k combined but due to job locations we live separately and need to buy so we can all live into same house again. We will have about $9000 for down. I also have to bare my bad habits and share that I frequently over draw my account but haven't in one month since trying to correct these issues and also have automatic withdrawals for savings. Credit card utilization is at 62 percent at last update but should be between 20 and 30 percent after my payments are updated. My latest success bumped my scores 30+ points in twelve days, that included getting the small clAims judgment marked as paid and an ATT collection removed... Please someone just shoot straight with me, are my hopes too high?

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 00:59:47 GMT

Someone please contribute something, even if it is horrible experiences? Please....

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 01:06:46 GMT

I am conditionally approved for USDA Guarantee and my minimum FICO had to be 640 but some lenders may go lower. I would call around and find the minimum score and what will be the requirements. My mortgage broker asked for 2 months of bank statements and 2 months of pay stubs.

Prior to you applying I would enroll in an on line banking feature with your bank and monitor each transaction to make sure there are no overdrafts.
If you have already paid the collections I would ask the creditor with a Good Will letter to please delete. If you have already paid in full call them to see if they will delete the tradeline. When my one collections removed from CRA my scores jumped approximately 27 points.
If all possible try to pay your credit card down to 9% utilization it may raise your score a few more points.

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 01:22:36 GMT

Im sorry I printed out my Credit Report and sent it over to a Mortgage Broker who looked it over and told me if there would be an issue. I would make sure that I have several trade lines reporting positively for at least one year. I went and got a furniture bill and paid it off in one year, it doesn't matter if it is a 20$ a month payment. If you don't have traditional lines of credit they can also use utilities. I also applied for Orchard Bank, I know that it will only give you a small balance but it did the trick in helping to raise my score. It took me a couple of years because I had defaulted on student loans in which I had to rehab them for 9 months after that fiasco in 2010 I had to deal with the collections 2011. I monitored my FICO Score with Equifax it matches exactly what the Lender Pulled 648, Credit Karma 690 Lender Pull 695, Experian FAKO 667 Lender Pull 646. Please don't despair because all things take time.

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 04:46:10 GMT

@Anonymous wrote:
I am hoping to buy a home in the summer. We, DH and I have challenging credit, with his scores in the low 580's to 590's. mine are just a bit lower, TU today was 581, Ex 553 and exp 595. He has excellent employment history and I have had two jobs in four years, and have been at this job for 11 months... I have been actively working at getting collections removed, and will have that taken care of this month on my credit. Last April a landlord sued me and won for damages (she has sued every tenant she has ever had and wins every time but I didn't know this when I rented), it is marked as paid last April as well. I have a charge off that was settled and I have that paid off as of March21st after making monthly payments for one year. The collection company said it would show up on my credit as paid and a zero balance very soon. I have not made any late payments in 15 months, with my last payments late on a payday loan and they will not go for a GW deletion, though I have mailed the CEO directly s hoping that will get me somewhere. Annual income is about $100k combined but due to job locations we live separately and need to buy so we can all live into same house again. We will have about $9000 for down. I also have to bare my bad habits and share that I frequently over draw my account but haven't in one month since trying to correct these issues and also have automatic withdrawals for savings. Credit card utilization is at 62 percent at last update but should be between 20 and 30 percent after my payments are updated. My latest success bumped my scores 30+ points in twelve days, that included getting the small clAims judgment marked as paid and an ATT collection removed... Please someone just shoot straight with me, are my hopes too high?

There are a lot of moving parts here, but I'll throw my $0.02 in. And let me begin by apologizing if any of this comes off sounding like Dr Phil meets Suzie Orman And, all of this is easier said than done, of course.

First of all, your income by itself may put you in good shape to get your credit habits back on track- the "I frequently overdraw my account" part has really, really got to stop, regardless of being credit cards or debit cards... The fees alone will drag your cash flow down the drain. I would seriously recommend working on budgeting skills, from top to bottom. At ~100k income, renting, and planning on saving 9k by Summer, you should have no reason whatsoever to be overdrawing any accounts!!! If this is difficult, consider only carrying cash on you for several months...

That said, there are some other pieces that would help us to help you- what open accounts do you currently have? Credit cards, car notes, personal loans, etc. Which of them have late payments? How old are they, and how late were they? What is are the balances and what are the limits on them? Taking care of you revolving credit picture accounts for a huge chunk of both your FICO score and the rest of your financial health. Cleaning up your report is another big chunk, which it sounds like you're working on.

I guess my point is that a lender will look at how you manager your credit, and you may be in better shape to take care of that before considering a mortgage. It's not as fun to rent to be sure, but another year might save you a ton of money...

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 16:52:44 GMT

@Anonymous wrote:

There are a lot of moving parts here, but I'll throw my $0.02 in. And let me begin by apologizing if any of this comes off sounding like Dr Phil meets Suzie Orman And, all of this is easier said than done, of course.

First of all, your income by itself may put you in good shape to get your credit habits back on track- the "I frequently overdraw my account" part has really, really got to stop, regardless of being credit cards or debit cards... The fees alone will drag your cash flow down the drain. I would seriously recommend working on budgeting skills, from top to bottom. At ~100k income, renting, and planning on saving 9k by Summer, you should have no reason whatsoever to be overdrawing any accounts!!! If this is difficult, consider only carrying cash on you for several months...

That said, there are some other pieces that would help us to help you- what open accounts do you currently have? Credit cards, car notes, personal loans, etc. Which of them have late payments? How old are they, and how late were they? What is are the balances and what are the limits on them? Taking care of you revolving credit picture accounts for a huge chunk of both your FICO score and the rest of your financial health. Cleaning up your report is another big chunk, which it sounds like you're working on.

I guess my point is that a lender will look at how you manager your credit, and you may be in better shape to take care of that before considering a mortgage. It's not as fun to rent to be sure, but another year might save you a ton of money...

Living apart lends to us being in trouble - he frequently borrows money from me to make sure his payments are on time as we've been trying to build up our credit and I am solely responsible for our car insurances, our cell phone bills, saving ANY money, paying all credit card debts plus my rent, utiliies, etc. I work TWO JOBS and the second income is going to pay off Cap One this month. He lives in a home we are buying and will be selling this May to my stepson and netting $13000 so our down/closing will come from that. The mortgage is NOT reporting on my credit accounts and that's because it is not financed in my name - though I wish it would because that would help - zero lates over the life of the loan - but my husband's scores are way lower than mine and I think that's because of his debt to income - he has a new (used) truck, balance is $10010 and zero payments made but his scores were 40 points lower before getting financed so that increased his score...

I have 3 credit cards:
Orchard Bank: 0/300 - opened 3/12 - 0 lates
Cap One: 700/1000 opened 3/2009 - 0 lates
Wal-Mart: 0/150 - opened 12/2008 - 1 late, Sept. '09

Car payment: $305 - only 3 more and it's mine - one late payment Sept '09...

Re: How hard is it going to be?

K_J — Mon, 02 Apr 2012 17:18:43 GMT

Cap One: 700/1000 opened 3/2009 - 0 lates I think you should pay down your Cap one card to below %9 util if you plan on buying this summer, though it might be difficult it is doable. I will advice you to plan very well so you don't overdraft anymore, honestly no one would consider giving you a mortgage loan if you are unable to balance your check book and remember the LO will ask for bank statements. Besides send out as many GW's as possible to remove any paid collections and PFD for once you anticipate paying. keep reading and asking questions this forum is great and I think you should be okay. Good Luck.

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 18:36:18 GMT

I have two checking accounts, should I move my direct deposit to the clean one at my credit union so that when they ask for bank records this will look better? It's been open for a couple of months....

Re: How hard is it going to be?

K_J — Mon, 02 Apr 2012 19:03:14 GMT

They usually ask for 3 months worth of bank statements though they may ask for more. I don't know if 4/5 months is enough being that you want to buy this (June/July) Summer. I would suget you speak to a LO to get some infromation ( lowest Score needed, # months bank statements, things you need to work on your CR) Is this account in good standing?( no overdrafts)

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 19:09:46 GMT

The checking account is in perfect standing. To even apply I need two months of statments, but if I wait to apply in May, then I have 3 months of clean history on one account and three on the other but some over drafts this year, I think ten - but on two OCCASIONS- meaning I thought they had pushed everything else through, then they bounce six things because they run things through largest to smallest and bounce everything but one item... Just figured that out!

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 19:16:59 GMT

(2) Get your credit card utilization even lower, if possible. Right now if you REALLY want a mortgage, you'll try any and everything to get it, and that means obtaining the optimal mix from your CC utilization, which is 1 card reporting at 1% to 9% and all others at 0.

(4) Automatic withdrawal from savings? Are you getting charged $5 everytime you do this?

(5) Your hopes aren't too high, but you have a LOT of work to do in a small amount of time. And one of the things that really is killing you is a lack of financial organization. But it's never too late, and trust me, I have this talk with a lot with a LOT of people on a weekly basis, so all is not lost. Keep working on all those GW's, PFD's, etc...

(6) Have you considered the possibility of renting for a year while you two get everything on track? Because it sounds to me that you MIGHT end up short on your goal, but that it's nothing that a one year rental couldn't help out with.

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 19:36:00 GMT

(1) Get your real FICO scores, even if it's just EQ. The fact that you have numbers from all 3, leads me to believe you actually have FAKOs, and as many people here can tell you, the difference of 2 points to get a mortgage loan can be HUGE. --- My numbers are from a lender pull - my FAKO's are actually in the 600's... But i know that means nothing!!!

(3) Budget. Please. There is absolutely no reason why a couple with a 100K annual income should be overdrawn in their checking account, unless you are living far beyond what you take in on any given month. This IS a bad habit and can only become MORE serious once you have a mortgage and all the additional expenses that come with it. And I'm going to use myself as a bad example. I'd love to buy a house soon, but we're going to rent first. Our annual income is about 65K a year in a state where the cost of houses is pretty high (property taxes too), but we are better served by waiting because of this even though our scores are optimal and we have no baddies/collections. - The income is joint, I exist on close to $45,000 gross on my own. We have lived separately - with me taking another job to make more money - but doubled expenses - for a full year and a half. I am renting now, he is living in the house we own. I don't mind renting another year, but he is ADAMANT about not moving more than once - which means if our daughters start school in August and we haven't moved yet to a house in the middle, we will live separately until Summer vacation 2013 and that thought causes me INTENSE distress as our three daughters are without a parent every day except the weekends...

(4) Automatic withdrawal from savings? Are you getting charged $5 everytime you do this? - Automatic to a SmartyPig account...

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 19:42:44 GMT

Have you two sat down and looked at the hard, cold numbers.

It almost seems to me like you two have increased expenses because you have so many jobs going on.

I didn't know you had three daughters. I read this thread as if you two were newly married or something to that effect, due to the current living arrangement, which in that case, for 5 people a combined of $100K really isn't much (I'm not trying to put you down, trust me.)

Right now you have another job, because you have another house.

It's MUCH more feasible to rent for a year, and just a year, if you can't hack it with the scores by summer.

You don't sound like you want to keep the current living conditions at all, and that's something that truly needs to be discussed. I've seen these scenarios play it in person before and usually it came out to play at the bank, simply because it wasn't discussed before. More people walk into a bank thinking they will be approved and not prepare for Contingency Plan B, than you could possibly think of.

If you really want this to happen, work on those PFD's and GW's like there is no tomorrow.

And no more overdrafting. They'll look at your bank statements. You don't want to show numbers with parenthesis' around them.

Re: How hard is it going to be?

Anonymous — Mon, 02 Apr 2012 20:38:38 GMT

I definitely feel the wise choice would be to move to a neutral location and rent for a year and save, increase credit scores, get to at least 700 and skip all this nonsense and conditions, etc. blah blah blah but he says he WILL NOT move twice. So my choices are: get the credit to 640 or live away from my spouse and daughter one more year. I do feel like I'm the only one contributing to the common goal, which makes it feel like it's not so common - where is Dr. PHil???

Re: How hard is it going to be?

Anonymous — Tue, 03 Apr 2012 00:01:16 GMT

You may have some success posting in the "Relationships and Money" forum. It sounds like there's more going on here than just dollars changing hands, so to speak.

If this person would rather not suffer through a second move than to be with you and let you see your daughter, a mortgage is probably not the ideal next step... Again, just my $0.02 - I have no idea what your situation is really like, or maybe he has a large collection of three-ton granite slabs that make moving very difficult...

Re: How hard is it going to be?

Anonymous — Tue, 03 Apr 2012 00:23:33 GMT

You sound so much like me, the one always giving and sacrificing. What I decided to learn how to say the word NO, I am cheering for you and praying that you and your husband will have one common goal. You control your destiny find out why you are having the overdrafts and eliminate the problem. Good Luck

Re: How hard is it going to be?

Anonymous — Tue, 03 Apr 2012 00:32:48 GMT

@Anonymous wrote:
You may have some success posting in the "Relationships and Money" forum. It sounds like there's more going on here than just dollars changing hands, so to speak.

If this person would rather not suffer through a second move than to be with you and let you see your daughter, a mortgage is probably not the ideal next step... Again, just my $0.02 - I have no idea what your situation is really like, or maybe he has a large collection of three-ton granite slabs that make moving very difficult...

I'm glad someone else said it, because I felt like I had been "rough" enough as it is already.

I know moving things for 5 people can get rough, but if it is worth it in the long run, I'd sacrifice a little hard work in the short-term.

Something needs to give and even though a year seems like a short amount of time for some things, it's also an eternity for others.

I think you need to analyze every option and consider every option. Whether it's getting your scores up, or moving to a neutral location, or remaining the same.

I can understand the time and opportunity costs of moving twice, but I put no price on being with family, that is priceless. You might have to come up with a more concrete and visual aspect to the "rent for a year" idea, one that he can grasp and understand. Sometimes, as men, we need to SEE the bigger picture rather than be told.

Good luck.

Re: How hard is it going to be?

Booner72 — Tue, 03 Apr 2012 00:37:47 GMT

I agree about moving to a central location to rent because w/ your 2 jobs, and DH out of town, your daughters are suffering. The extra money is just going to pay off debt? I think you have so much going on that you guys need more time. I really do. I'd hate for you to focus focus, think it's going to happen, then 2 months turns to 6, then 8, and all along, the kids are home alone and you guys could have moved to the neutral location so they could start their new school. Also, the younger the better to move kids.

Also you said that you think DH's scores are low because of his DTI - FICO doesn't score DTI. Income doesn't matter. But if you mean DTI in that his revolving debt is also maxed out then yes, it would count.

Did I miss you mentioning what positive accounts you have?

Even if you did move to the "good" checking account, they are going to wonder what you did before, that is going to look suspicious, and they might scrutinize the "bad" one even more. Also if you don't change the 'bad habits' then the "good" account will just become "Bad # 2"

My scores were a tad higher than yours, and it took 8 months to get them to 640. (November - July). I had collections and high revolving and a judgment.

Purely out of curiousity's sake...what did your landlord sue you for?

Re: How hard is it going to be?

Anonymous — Tue, 03 Apr 2012 02:53:27 GMT

Booner, she sued me for damages to 28 year old carpet and won. She has literally sued every tenant for the same blastednthing and has won 6 times. SIX. My husband did a lot of work for her and when we moved in she said, "this carpet really needs updated, it is horribly stained!" in front of my friend who sent a letter testifying to this. It was the most awful experience ever. She had no evidence except pictures she took the week before we moved out when she entered the property without permission. I am going to give my scores a month to update utilization is down. If they aren't getting closer by then, we will have to have a serious talk and decide whether to stay where we are or rent to someone that doesn't run a credit check! Then we will be in the same boat. Thanks for your prayers...

Re: How hard is it going to be?

Anonymous — Tue, 03 Apr 2012 02:56:24 GMT

Well the checking account I would move to would not be a joint account and I would move to my own account so I could explain that.... Right??