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FHA questions

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Contributor

FHA questions

There is a broker a few hours away the company he works for is Guarunteed Rate, hes advertising as low as approving a 580 score but I am assuming its an FHA loan, I haven't heard of any other home loans approving that low. I have some questions about FHA, I don't want to waste my time going for it, if there isn't anyway to get approved. Do they use FICO 8 or another scoring model. My middle FICO 8 is 610. My middle mortgage score(according to myFICO dasboard) is a 542. I can't afford the 10% downpayment if I can't get approved for the 3.5% down. Also I have $3300 in collections right. I am working on paying back one at a time, due to a job loss I took in 2016. From 2017-2018, I was going back to school. But I had to drop out due to my wife having heart issues and no longer being about to Continue her job, I was working part-time in Fast Food while in school but working full-time hours legally. I averaged 34 hours a week during school August-May but I was 40 hours May, Jun, Jul. I now currently 60-70 hours a week. Have since September. These things combined would disqualify me from an FHA loan correct? I have upcoming student loans soon. With my collections my DTI ratio might be too high. With my work history and paying down debts would it be possible to pay this down over the next year and make it possible? I want to prepare as much as I can so I don't end up in a place I can't afford.  My current FICO 8 are in my signature. Any advice would be greatly appreciated

 

04/2019 - Experian 597 - Equifax 610 - Transunion 619
01/2017 - Experian 479 - Equifax 457 - Transunion 461
04/2017 - Experian 502 - Equifax 473 - Transunion 476



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7 REPLIES 7
Contributor

Re: FHA questions

From my understanding you need at least a middle mortgage score of 620 to qualify for the 3.5% down.

Depending on your state you may qualify for down payment assistance after getting above 640.

FHA doesn't have a maximum income, only a maximum loan amount.

You haven't provided enough information for anyone to help guide you as far as DTI or your ability to pay things off in the next year.

Others will be able to better help answer your questions if you would list your:
Purchase price of homes you're looking at.
annual income.
All loans (including student loans) and their minimum payments.
Credit cards: creditor / Balance/ Limit /age and minimum payment.

Collection company (someone might know how to best deal with the company) amounts owed/reporting.

With the information you've provided my guess is you will not qualify for the loan terms you want.

By providing the information above those with mortgage knowledge will be better equipped to help you map out a plan that will get you in a home you can afford.
Starting Score: EQ:608, EX:617, TU:625
Score 10/2018: EQ:669, EX:686, TU:668
Score 11/17/2018: EQ:682, EX:681, TU:683
Current Score 7/7/2019: EQ:705, EX:672, TU:694
12/24/2018 -- EQ Beacon 5.0: 678, EX Fico II: 690, TU Fico Classic 04: 716

Goal Score: 740+


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Message 2 of 8
Regular Contributor

Re: FHA questions

chiefone4u hit all this exactly right, with a bit more information can certainly help a lot more. There isn't a lender out there I know of that uses Fico 8 scores for mortgage lending.

Message 3 of 8
Highlighted
Frequent Contributor

Re: FHA questions

I'm closing Wednesday with a FHA loan through guaranteed Rate. They use your mortgage scores here not FICO 8 .

Starting Score: Eq 485 TU 467 Ex 400 BK filed Dec 2016
Current Score: Eq 672 TU 649 Ex 644
Goal Score: 700 All 3


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Message 4 of 8
Valued Member

Re: FHA questions

you need a minimum of 580 for 3.5% down which is what we are doing right now. We are 1 step away from pre-approval for FHA

Message 5 of 8
Valued Member

Re: FHA questions


@chiefone4u wrote:
From my understanding you need at least a middle mortgage score of 620 to qualify for the 3.5% down. Its 580 for 3.5% down and 620 for down payment assistance.

Depending on your state you may qualify for down payment assistance after getting above 640.

FHA doesn't have a maximum income, only a maximum loan amount.

You haven't provided enough information for anyone to help guide you as far as DTI or your ability to pay things off in the next year.

Others will be able to better help answer your questions if you would list your:
Purchase price of homes you're looking at.
annual income.
All loans (including student loans) and their minimum payments.
Credit cards: creditor / Balance/ Limit /age and minimum payment.

Collection company (someone might know how to best deal with the company) amounts owed/reporting.

With the information you've provided my guess is you will not qualify for the loan terms you want.

By providing the information above those with mortgage knowledge will be better equipped to help you map out a plan that will get you in a home you can afford.

 

Message 6 of 8
Contributor

Re: FHA questions

I make $60K a year. I lost my job in Oct 2016 and I have been working on paying things back from a financial set back.

 

My accounts

$22K in student loans through mohela - waiting on them to verify my income for PAYE payment plan
$3144- Discover - account has closed began making payments before it could go to collections $79/month since December 2017

$237- CL $300 wifes Citi account I am authorized user. This has helped my score just having revolving credit Min payment - $25 but we pay $40 Age - 2/2018

 

My Collections are

JH Portfolio - BRU/TRU card - $2543
TransWorld - medical debt - $160

Transworld - Medical debt - $94

Portfolio Recovery - Capitol One QuickSilver - Starting Balance $604 current $435 - $50/month

Portfolio Recovery - Simply Mac - Starting balance $1730 Reporting balance $38 - I don't know why its showing $38 due I paid this off in March. I have been waiting for a copy in the mail for proof that it is paid off but have not recieved it, Its been about 30 days. 

Car Payment is through my in-laws we pay them every month. But it is not on my current car, I own that car. 

 

I am not sure on housing price just yet. My goal is to start buying in a year if I can get my credit up. My rental is falling apart so I wanted to buy, buy now, but I have a feeling its not possible. If I could start the process in March 2020 that would be my goal. The only thing I worry about is my work history for next year. I will have only been at my job a year and a half. May 2017 - September 2018 I was a full time student while working 32-36 hours a week. 

 

04/2019 - Experian 597 - Equifax 610 - Transunion 619
01/2017 - Experian 479 - Equifax 457 - Transunion 461
04/2017 - Experian 502 - Equifax 473 - Transunion 476



Discover $4500
Message 7 of 8
Valued Contributor

Re: FHA questions

You have work to do!
FIRST - to get your Mtg Scores up the fastest is it possible to get family to advance you the money to pay the Collections off NOW. Make Mom and Dad the monthly payments. If possible negotiate with each in hopes of getting a Delete Collection from record in exchange for paying them off. Getting rid of these immediately will give your FICO Scores over the next year time to recover.

SECOND - you pay your folks for a car. That’s great now don’t tell anyone that again! That’s family funny business and can only hurt your DTI.

THREE - you need 12 months minimum of perfect payments. Do not make a late payment from here on out. You also need to understand that the lender will go over your bank stmts with a fine tooth comb (all pages, line by line) This means NO NSF or OD Charges some banks (all mine) actually have a YTD Fee section on your bank stmt. Do not give a stmt to a lender with info like that. I have a sister who thinks 4 NSF checks at $34 a hit each month is no big deal! Well it’s a deal killer, I made her get a new acct about 4 months prior to making application to get rid of any evidence of these poor choices on her part.

Good Luck and given a year your should be looking much better, and as others have said you need your Mtg Fico Scores and NO Lender uses Fico 8 for Real Estate Lending.
Message 8 of 8