End of the Road - Need to Apply NOW - Any Help??

[firemartinez1980]

My wife and I are currently renting a house and the lease ends August 1st. Our goal was to have debt paid down and scores up and be able to apply for a VA Loan the 1st of April.....Fast forward a bit and it's now June 1st and we still haven't applied yet, mainly because I paid off some extra debt and was waiting for my credit to reflect it.

Quick Breakdown

My Current "Middle" score is 631 and the only debt left I have is a $29,000 Auto loan. My Income is around $50,000 per year

My credit has no updated and there is nothing left for me to pay off and I have no other clue how to raise my score anymore now.

Basically I need to either Apply ASAP or start looking for another house to rent soon as August 1 will be here before we know it.

So in everyone's opinion, Will I be approved with a 631 score for a VA Loan?

How big of a hit will my score take due to the "Inquiry"?

When a lender pulls credit for a Mortgage, is the score before or after the pull the one considered?

Thanks for any and all help

[Anonymous]

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@firemartinez1980 wrote:

My wife and I are currently renting a house and the lease ends August 1st. Our goal was to have debt paid down and scores up and be able to apply for a VA Loan the 1st of April.....Fast forward a bit and it's now June 1st and we still haven't applied yet, mainly because I paid off some extra debt and was waiting for my credit to reflect it.

Quick Breakdown

My Current "Middle" score is 631 and the only debt left I have is a $29,000 Auto loan. My Income is around $50,000 per year

My credit has no updated and there is nothing left for me to pay off and I have no other clue how to raise my score anymore now.

Basically I need to either Apply ASAP or start looking for another house to rent soon as August 1 will be here before we know it.

So in everyone's opinion, Will I be approved with a 631 score for a VA Loan?

How big of a hit will my score take due to the "Inquiry"?

When a lender pulls credit for a Mortgage, is the score before or after the pull the one considered?

Thanks for any and all help

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My advice would be:

1) Take a step back and breath.  Do NOT let this timeline rush you into something that will effect you for the next 15-30 years.  Finding a way to deal with an immediate short term issue should be a priority over risking the next few decades of your life.  depending on the details of your credit and finances we could be talking tens of thousands of dollars, PMI, and years of a mortgage.  

2)  Contact your landlord about going month to month or renewing the least with an out-clause that allows you to break it with like 30/60/90 days notice.  Landlords will typically accomodate this with a raise in rent (5-25% seems reasonable based on risk for them).  In the current landscape, they may be worried about renting and be more open to you contnuing to rent.

3)  give us your financials.  we cant be nearly as helpful with just a credit score:

-do you have a co-borrower (your wife I assume?).  We will need the following for BOTH of you (having just yours does little good, as the mortgage company will take the middle score of the lower applicant.  you have 800s across the board doesnt help if your wifes middle score is 650).

-What is your annual income, your wifes annual income?

-What is your debt/your wifes debt (this included minimum credit card monthly payments, minimum monthly install ment loan payments like student, personal, and auto loans, and child support/sttlement payments).

-How much are you looking to borrow/buy the house for?

-how much do you have for a down payment

Credit stuff:

-list all your credit cards like this:  [Card Name | Balance | Limit | age] do this for all cards for you and your wife seperately

-list any lates/derrogatories/collections you have

-list and charged off accounts and the balances

-list your hard inqueires and not the age of any that are less than 12 months old

-list any installment loans (school loan, personal loan, mortgage, auto, etc...)

Based on that we can help you with next steps to boost your score and also give you an idea of what you would qualify for and if its better to apply together or under just 1 of you

[firemartinez1980]

My Info:

Salary - $48,000 per year

Debt - Auto Loan with $29,000 balance, Nothing else

Currently Employed at same job for 19 years

No Collections, No missed payements in last 12 months

Wife's Info:

Salary - $28,000 per year

Debt - Credit cards and 1 loan ($6800 Balance on both)

No Collections, No missed payments, Excellent overall credit with scores around 700

[j94mile]

I was in a similar situation and wasnt sure I was ready to apply. It being my first home purchase and all it was very scary. I wanted to wait on my credit files to update as paid off or paid down.  I spoke with a realtor and she said most lenders can do a rapid rescore. I spoke with 2 different lenders. One said to wait to apply til all my credit files were updated and the other said you can apply now and we will do a recheck of credit before closing.  I went a head and applied. I got locked in for a fha loan (middle credit score of 686) with interest of 3.375%. Today he repulled my credit (all my accounts have updated) my middle score went to 705 so he's gonna resend the loan agreement with a lower interest rate.  I say go for it, you wont know until you try. Best of luck!

[NC_Mtg_Loaner]

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@firemartinez1980 wrote:

My Info:

Salary - $48,000 per year

Debt - Auto Loan with $29,000 balance, Nothing else

Currently Employed at same job for 19 years

No Collections, No missed payements in last 12 months

Wife's Info:

Salary - $28,000 per year

Debt - Credit cards and 1 loan ($6800 Balance on both)

No Collections, No missed payments, Excellent overall credit with scores around 700

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I think you need to add another credit card if you want your score to go higher.  Of course with a 631 middle score you should be good to go with a VA loan.   

[Anonymous]

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@firemartinez1980 wrote:

My Info:

Salary - $48,000 per year

Debt - Auto Loan with $29,000 balance, Nothing else

Currently Employed at same job for 19 years

No Collections, No missed payements in last 12 months

Wife's Info:

Salary - $28,000 per year

Debt - Credit cards and 1 loan ($6800 Balance on both)

No Collections, No missed payments, Excellent overall credit with scores around 700

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This is helpful, but still not enough info to really help/give you estimates.  Your wifes scores being 700 is a good thing, but irrelevant if yours are lower.  If you are applying together for the mortgage, they will take the middle score of the lowest applicant.  so if your scores are lower than hers, than hers will just get thrown out and the 2 of you will be graded on your middle mortgage score.  Unless your wife applies for the mortgage alone, they you get the benefit of her credit score but lose the benefit of the combined salary.   I cant give advice on how to improve your credit until you give the details above, but i can estimate what you would qualify for now both jointly and just under your wife.

Typically lenders will extend 3-4X salary/income.  so if you apply together thats about $240K-320K.  They would use your score, which is under 700, so you are probably look at an APR in the mid 4s.

If your wife applies alone, she would qualify for a lower rate in the 3's but she would be looking at much lower approval for how much she can borrow.  closer to $90K-$120K.

Ideally, you would get your scores in the 700s and you would have the best of both worlds.  in order to make suggests to boost your scores the highest in the shortest time we would need to know:

• Do you have any credit cards?
• If so list all the cards, the balances, and the limits
• You said you have no lates the last 12 months.  what about the past 7 years (after 7 years they no longer count)
• Can you list your wifes credit cards, the balance and limit on each individually.  it matters what the individual details are, not just total

Your situation isnt uncommon.  we can help.  but we need a bit more detail.  hang in there.  if you improve your credit it will go a long way