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We have been working on our credit for months now and hope to apply in August once we get our savings back up. I know we still have some issues that are going to be a pain to get past to qualify so I'm looking for reassurance or advice.
First, my EQ FICO score is 623 and TU is 626. I have a SL that is killing me since I was late on it in 2006 when it was transferred to another lender. I have been current since 2007, but because of the way it reports, it shows as 8 accounts between the 2 lenders, all showing the lates I had during the transfer. I've tried to GW them off with no luck. I have a paid charge-off($211, still showing a balance of $88 since I settled), a paid collection (for $234) both from 2009, and an unpaid collection for $597 in 2009. The LO I spoke to a couple months ago said our unpaid collections could not exceed $1000, which I know having paids is better than unpaids, but I really do not want to pay that one if they won't do a PFD. I have several open CC's, all in good standing with low balances, less than 10% util. A couple of them have been recently opened though. Not planning on opening anymore.
Husbands credit has been a total nightmare, even more than mine, but his score is much higher than mine is. He has a BK discharged in 2006, 2 PIF judgements, and even after getting some to PFD, he still has some paid collections showing. I think the most recent is from 2008, which has been a while, but is still after his BK, which worries me. He had several loans and such showing on his CR with all good payment history, but they are all PIF and no longer reporting. He has a few CC's in good standing, 1 is opened recently, in February. 2 are from being added as an AU on my older accounts that have always been in good standing. EQ was showing "no score" since he didn't have anything currently reporting, but I have since added him to one of my older accounts that reports to EQ so we are just waiting for that to come through on his CR to get a score from them. His TU FICO score is 711.
Together, our base monthly income is $8500 gross. We have no auto loans to add to our debt, our CC payments are low (about $100) since our util is below 10%...we just carry a small balance. My SL payment is $102 a month, and I only owe about $5,000 before they will be paid off. He has a child support payment of $793. Everything else is utilities and extras. Employment history is great, I have 6 years at my job, he has 3 years at his.
Any advice, suggestions, or reassurances? Does it sound like we could get approved in August?
@Megacab07 wrote:We have been working on our credit for months now and hope to apply in August once we get our savings back up. I know we still have some issues that are going to be a pain to get past to qualify so I'm looking for reassurance or advice.
First, my EQ FICO score is 623 and TU is 626. I have a SL that is killing me since I was late on it in 2006 when it was transferred to another lender. I have been current since 2007, but because of the way it reports, it shows as 8 accounts between the 2 lenders, all showing the lates I had during the transfer. I've tried to GW them off with no luck. I have a paid charge-off($211, still showing a balance of $88 since I settled), a paid collection (for $234) both from 2009, and an unpaid collection for $597 in 2009. The LO I spoke to a couple months ago said our unpaid collections could not exceed $1000, which I know having paids is better than unpaids, but I really do not want to pay that one if they won't do a PFD. I have several open CC's, all in good standing with low balances, less than 10% util. A couple of them have been recently opened though. Not planning on opening anymore.
Husbands credit has been a total nightmare, even more than mine, but his score is much higher than mine is. He has a BK discharged in 2006, 2 PIF judgements, and even after getting some to PFD, he still has some paid collections showing. I think the most recent is from 2008, which has been a while, but is still after his BK, which worries me. He had several loans and such showing on his CR with all good payment history, but they are all PIF and no longer reporting. He has a few CC's in good standing, 1 is opened recently, in February. 2 are from being added as an AU on my older accounts that have always been in good standing. EQ was showing "no score" since he didn't have anything currently reporting, but I have since added him to one of my older accounts that reports to EQ so we are just waiting for that to come through on his CR to get a score from them. His TU FICO score is 711.
Together, our base monthly income is $8500 gross. We have no auto loans to add to our debt, our CC payments are low (about $100) since our util is below 10%...we just carry a small balance. My SL payment is $102 a month, and I only owe about $5,000 before they will be paid off. He has a child support payment of $793. Everything else is utilities and extras. Employment history is great, I have 6 years at my job, he has 3 years at his.
Any advice, suggestions, or reassurances? Does it sound like we could get approved in August?
In my opinion you have a good chance at approval depending on the type of loan you are seeking, and amount of down payment you have available and how much money in reserves you will have after closing.
Just a little reminder since your scores are borderline once you do apply the INQ may bring your scores down just enough to cause you delays in the approval process.
Thank you for your response!
We would have had a fairly large DP but we had to use some of it to pay the things on husband's credit so now we are looking at a DP between 3.5 and 5%. That will leave us with enough for closing costs and very little reserve. So we're most likely looking at FHA. I know it's dependent on the lender, but FHA doesn't usually require much in reserves do they?
I didn't even think about the INQ bringing it down. That stinks. Of course we want the best rate possible, but at this point, we are just needing to get in a house any way we can. Maybe refinance later when our scores are better. We aren't looking to max out our budget on a mortgage payment every month so we are prepared to pay a little more if we have to because of my credit scores.
I just want to feel comfortable when we go in to actually apply!! Thanks again for the thoughts!!
@Megacab07 wrote:Thank you for your response!
We would have had a fairly large DP but we had to use some of it to pay the things on husband's credit so now we are looking at a DP between 3.5 and 5%. That will leave us with enough for closing costs and very little reserve. So we're most likely looking at FHA. I know it's dependent on the lender, but FHA doesn't usually require much in reserves do they?
I didn't even think about the INQ bringing it down. That stinks. Of course we want the best rate possible, but at this point, we are just needing to get in a house any way we can. Maybe refinance later when our scores are better. We aren't looking to max out our budget on a mortgage payment every month so we are prepared to pay a little more if we have to because of my credit scores.
I just want to feel comfortable when we go in to actually apply!! Thanks again for the thoughts!!
Your scores have no impact on the rate with FHA loans. Depending on the lender they may want to see some reserves usually 1-3 months in payments. In my opinion give 3.5% down if helps with your reserves and try to have seller cover all of or as much of the closing cost as possible.
What is a good cushion to have since my scores are borderline? We're wanting to apply pretty quickly so don't have a lot of time to just wait for them to come up. CC util is already pretty low, but I will pay all but one showing a balance and see what that does. I've emailed the LO I was talking with but have had no response...maybe I'll call someone different....
@Megacab07 wrote:What is a good cushion to have since my scores are borderline? We're wanting to apply pretty quickly so don't have a lot of time to just wait for them to come up. CC util is already pretty low, but I will pay all but one showing a balance and see what that does. I've emailed the LO I was talking with but have had no response...maybe I'll call someone different....
I would also try and contact another LO or Broker. I wouldn't want to do business with any LO or Broker that wasn't willing to take the time to help me and look out for what is in my best interest.