FHA Mortgage 2 Years Post CH7 BK... Advice?

[RebuildinginSTL]

Hello all-

I desperately want to get a mortgage in March or April 2022. My two year anniversary for my CH7 D/C is this March 2022. Currently, my credit and income situation are below:

Cards:

Cap1 Platinum CL 5,500

Mercury Card CL 2,500

Cap1 QS One CL 1,500

Ollo Card CL 2,900

Cap1 Venture 5,500

Total CL 17,900

Utilization: 29%

Income: $82K / yr

Other Debts:

PenFed Auto Loan: $19K, $307 per month.

Student Loans: $39K, $210 per month.

Cash to Put towards Down Payment:

$14-15K

Fico 5,4,&2 are:

Eq-706

TU-678

Exp-659

My questions are:

1) Do you think I will be successful in getting a mortgage (FHA?). Any guesses on how much they will give me?

2) What should I do to increase odds of approval or lending limit in the short term? Should I try to get more CCs?

Thanks!

[Mjhall85]

I too am coming up on my two years so will be going to buy a house soon. I would try to get your cards all down and practice AZEO to have optimial score. As your mid score is currently 678 which is pretty good but it could be higher. As far as how much house you can afford  I don't know that answer but maybe the mods can move this to the mortgage section so those who frequent that area can help better.

[dragontears]

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@RebuildinginSTL wrote:

Hello all-

I desperately want to get a mortgage in March or April 2022. My two year anniversary for my CH7 D/C is this March 2022. Currently, my credit and income situation are below:

Cards:

Cap1 Platinum CL 5,500

Mercury Card CL 2,500

Cap1 QS One CL 1,500

Ollo Card CL 2,900

Cap1 Venture 5,500

Total CL 17,900

Utilization: 29%

Income: $82K / yr

Other Debts:

PenFed Auto Loan: $19K, $307 per month.

Student Loans: $39K, $210 per month.

Cash to Put towards Down Payment:

$14-15K

Fico 5,4,&2 are:

Eq-706

TU-678

Exp-659

My questions are:

1) Do you think I will be successful in getting a mortgage (FHA?). Any guesses on how much they will give me?

2) What should I do to increase odds of approval or lending limit in the short term? Should I try to get more CCs?

Thanks!

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1. You should be fine in being able to qualify for FHA once your 2 year seasoning period is up. There isn't really a need to "guess" how much you can qualify for, it is based on your DTI with the only real variable being what the tax rate is on the new house. The formula is:

Gross annual income/12 = gross monthly 

Gross monthly income * program DTI limit (fo FHA they can go really high on DTI if the lender has no overlays) = max monthly obligation

max monthly obligation - all minimum payments listed on your reports (as well as any known debts not on your reports) = maximum PITI payment. 

If you want/need a higher amount you need to decrease your debts and/or increase your income. 

2. Pay off all of your credit cards and let only one report a small (~$10) balance. 

DO NOT OPEN ANY MORE ACCOUNTS.  Your scores are too low to risk the drop in mortgage scores that accompany new accounts. 

[Anonymous]

I would get my utilization down so your DTI will come down some

Secondly, know what the FHA loan limits are in your area. I was approved for $525,000 loan where I live (Seattle, Washington) but I found a new construction house I wanted across the water (Bremerton, Washington) that was $499,900. The problem was the FHA limits were $3XX,XXX in that county and the limits in my county was $7XX,XXX so the house would not work in the FHA program