I am desperately trying to help a friend and his family prepare to purchase a home. However his patience is very thin. His lease is up in September and they are raising the rent. He only owes $5k of debt but has never paid a bill on time. He has no record of good payment history whatsoever. Recently he came into a $13k and I recommend the
plan below to him. His goal is to apply for a mortgage in September but I told him he may want to wait for a year of on-time payments. None of the accounts listed on his credit reports are positive. He does not have 20% down payment. Here's where we are:
Cap1 charge off $212 - They just accepted $124 to settle acct.
Verizon Collection $3k last day of activity 3/2016 ages off 3/2023 - I advised him to wait for this to age off in March 2023.
Swiss Colony Collection $230 last activity 2012 - Dispute to remove
IC Sys/At&t Collection last activity 2017 $900 - They accepted $550 for PFD but are refusing to give him anything in writing
Carefirst Animal Hospital Collection $194 - Account and company no longer exist so I recommended dispute to remove
Caine Weiner/Progressive $450 - Will accept his PFD but are also refusing to put in writing.
Also he purchased a home in 2000 that he paid off in 2012 but it does not appear anywhere on his credit report.
He is trying to rebuild starting this month (March) with:
Fingerhut $300
First Premier $300
Secured CC (TBD) $3000
Again the problem I'm having is convincing him that 6 months of on-time payments may not be enough to qualify for a mortgage and that if he pays Verizon (even if they are not willing to PFD) that his 7 years will start from the day he pays them. Can you please share your expertise? Can he indeed get an FHA 3.5% home with only 6 months of positive payment history and removal of his baddies? Maybe I'm wrong for thinking it's a long shot.
