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Getting Ready to Apply for First Mortgage!

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Anonymous
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Getting Ready to Apply for First Mortgage!

Hello!

 

I'm ready to buy my first house in the spring of 2017 and I need to get my credit in shape so that I can get approved for a mortgage.  My current FICO 2 scores are EQ-587/TR-598/EX-596.  I have nine collection records, four that are marked as paid and five that are outstanding (four of which I will have paid off in the next two months, the last will be paid off before the end of the year), so there will be no outstanding collection accounts when I apply for my mortgage.  My only outstanding debt is two student loans (totaling $11,237 - all of which is in deferral since I am still in school).  I've noticed fairly significant increases in my scores (about 100 points) since I started monitoring my reports and actively working on my credit issues in March.

 

I do have a couple of questions/concerns that I'm hoping I can get advice on:

  • Credit Rating: what number can I aim for where I can get a reasonable interest rate without having to make a 20% down payment? Is there anything I can do to get my score to go up faster?
  • Employment History: I looked at the thread that talked about info needed to qualify for a mortgage and it mentions that you need a “2 year employment history” – is that at one job or in general? I’ve been working for 15 years but I’ve only been in my current job or 7 months (it will be a little over a year when I apply for my mortgage in the spring).  There was a brief unemployment gap of 4 months before that but otherwise I can show paystubs going back for years.  Is that going to be an issue?

 

Any help you can give answering my questions would be greatly appreciated!

 

Kelly

4 REPLIES 4
Sbrooks1
Valued Contributor

Re: Getting Ready to Apply for First Mortgage!

Hey Kelly!! I am also hoping to buy in the spring if God willing, I am going to shoot for at least a mid if 690-700. That's me though , I know most lenders in my area will not go below 640 even FHA and USDA is a lender overlay but I've found it to be every mortgage comp ice contacted say min 640. If you do FHA they still require 1%of the student loan to count as Payment in DTI . Pay all but one card to 9% uti and goodwill any Lates do NOT pay off any other collection without negotiations for a PFD if they say no , a lot do, PIF and GW them like crazy! Good luck and maybe next year we will both be homeowners!
Message 2 of 5
Anonymous
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Re: Getting Ready to Apply for First Mortgage!

Kelly, how old is your most recent collection? Paying them off will do little to help your credit score jncrease. You might do better by adding positive accounts. Do you have any secured credit cards? Can you be added as an authorized user on any family members cards? I had 580 score, adding a secured card and being out on a friends card helped my score jump even with 3 open unpaid collections.

I talked to a loan ofc at my credit union this week, he assured me with a 640 mid score i could qualify and he said he has worked there 10yrs and never saw the bank require anyone pay open collection accounts.
Message 3 of 5
Anonymous
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Re: Getting Ready to Apply for First Mortgage!

Thanks for the response!  I've heard about the minimum 640 score as welll, that's why I'm trying to get my credit report cleaned up ASAP so that my score has time to go up as much as possible before I start applying in April 2017.

 

Good luck to you on your homebuying process as well!

Message 4 of 5
Anonymous
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Re: Getting Ready to Apply for First Mortgage!

There is one collection account from February 2016 (small enough that I hopefully can PFD) but the others are from 2014 or older.  I opened a secured Discover Card in June and I am an authorized user on an BOA card for a family member.  Is there any way to see if adding another line of credit would add to my score?  I'm concerned that I'm going to start taking away from my score instead of adding to it.

 

I like the idea of talking to the load office at the bank - they can at least give me an idea of where I stand and when I could be approved for my loan.

Message 5 of 5
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