Would like some positive information on what to do in our situation. We are in search of a home, the husband has a stable job has a decent salary. We live in a big city so we will be buying a bit further. His middle score is 588, we have roughly 19k in savings that are for downpayment and closing cost. We will be saving a lot more in the next few weeks since we paid down a lot of debt, and is like an extra income now. We applied for a 300k mortgage, but it was for a 2 unit, so the second unit could pay for the taxes. Now we are back to a one family home, the budget would be under 200k.
We were denied the mortgage with NFCU, LO said we'd have to put down 10% rather than the 3.5. Because the score at the time was 573. She said we would need 580. Now that it is should we call back and renegotiate the terms? Have her re-run credit? And lower the lending amount? The houses are selling like crazy right now some are lasting just under a week. The ones that are a bit older that need some work stay a lot longer. The savings are split between, savings account, $6,000 gift my mom gave us, and 8k in 401k (from old job).
What is the best course of action? We really need to move this year. I am getting some extra jobs to help out in adding more to the savings, We have applied to a lot of lenders within that 14-day gap. And everyone across the board sort of says the same thing. One gave us the option of the 3.5 but we'd have to have 3 months in savings of the mortgage.
It sounds like you've made some progress and based on the level you are currently at--it seems like time is really the only thing that stands in your way towards getting better terms for your loan.
It's tough to say why your score is where it is without knowing more about your credit profile, but if you continue to focus on maximizing your score----paying bills on time, reducing your credit utilization ratios along with distancing yourself from any past derogatory events--your score will continue to rise and you'll be a bit more attractive to all lenders as your history improves, so keep that up as you 'gauge the market' while getting poised to purchase a home.