Conditionally approved and then denied???

[Anonymous]

Hi,
I was pre approved and then conditionally approved. After a month of waiting I was denied by the underwriter for an FHA loan.

Background: low credit score (averages 610). Debt: student loans $38k (income driven payment $0), authorized user on a cc (2,000 limit owe $757), car loan (7 months left owe $2400 one late), $1,200 in old debt. That’s it.

Income: $28k at full time job & $2k at a part time job.

House: land contract. Established 7 years ago. Trust fund that owns the home wants me to get a loan ASAP due to trust closing/ land contract being up. County appraised home at $164k. My purchase price is $120k.

Problem: if I don’t get a loan soon I will lose the house plus lose $50k in the equity of the land contract.

Question: I was conditionally approved with Carrington Mortgage and then denied do to dti. Are there any other companies that will consider me ? And how can I get my credit score up to 620 ? If I get it to a 620... is there more wiggle room with dti ?

[JVille]

Have you worked the 2nd job a full FULL 24 months? And was the FHA Appraisal done yet?

[JVille]

$1200 Old Debt exactly what does that mean? Is this a collection? And what is the Date on that debt?

[Anonymous]

The fha appraisal was not done.
My second job (part time): I have worked at for 3 years. It’s a job where I can work as little or more if I want. 3 years ago, I worked 4 12 hour shifts a month. Then I cut back to one or 2 12 hour shifts a month the last 2 years. The underwriter basically red flagged me because my part time employment hours dropped from 2016 to 2017. If I knew that I was going to be discriminated for that... I would have kept doing 4 12 hour shifts a month.

[dynamicvb]

If it was DTI that caused the denial, then getting your score up probably won't help. You need to get some debt down. What is your DTI percentage? I think FHA does not really do anything much over about 31-43% but have seen some posts here with people saying they have done them over 50%. Not sure whether there where other compensating factors such as reserves, down payment size, etc.. that allowed a higher DTI

See what FHA.com says about it here and how to calculate DTI if you don't know what your's is.

https://www.fha.com/fha_requirements_debt

[Anonymous]

Collection debt that is 3 - 5 years old.

[JVille]

That is an UW Judgement call, a different lender will have a new set of eyes. We are now 5 months into 2018 and the should be looking at the hours worked the first 5 months of this year too. Are those hours in line with 2017?
If you are working with a RE Agent then they should have their own “go to” lender when the going gets tough! Go get another lender.

What is the OLD debt, if it’s a charge off or collection then that is part of the score issue. Please provide details.

[JVille]

Is this one acct or more, is it Medical or??? Please this is important.

[JVille]

Need to know who these collections are in order to advise on each one. These are holding your score down. Medical are handled differently than say Verizon or Capital One.

[Anonymous]

Thanks for helping...
Kohl’s account that was a charge offin ‘15 for $574
Collections:
Capital one $400
Buckeye lending solutions $300
Progressive insurance $111