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Hope to buy first home within next 6 months, what steps and will I Qualify?

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JBinBigD
Established Member

Hope to buy first home within next 6 months, what steps and will I Qualify?

What steps should I be taking?  Are my finances in the right order to qualify?

 

My credit scores are TU 607 and EQ 601.  In May, two 30-day and one 60-day late payments will fall off credit report leaving a perfectly clean payment record for the last two years.  Also just finsihed rehabbing a defaulted student loan that should go off my credit report.  So I think I can get over 650 within a few months.

 

My salary is $58K (eleven years w/same company) with less than $7,000 total debt including auto loan ($1K), student loan($5K) and a credit card($200).  I have about $1500 saved and plan to sell my Jeep when its paid off to amass about $10K down payment.

 

Looking at houses in Irving, TX in the $200K price range, what would my mortgage payment be with taxes and whatnot?  $1250 I assume but not sure about taxes, homeowners insurance, mortgage insurance.

 

Please help me get on the right track for this to work out.  Thanks!

Message 1 of 9
8 REPLIES 8
JM-AM
Valued Contributor

Re: Hope to buy first home within next 6 months, what steps and will I Qualify?


@JBinBigD wrote:

What steps should I be taking?  Are my finances in the right order to qualify?

 

My credit scores are TU 607 and EQ 601.  In May, two 30-day and one 60-day late payments will fall off credit report leaving a perfectly clean payment record for the last two years.  Also just finsihed rehabbing a defaulted student loan that should go off my credit report.  So I think I can get over 650 within a few months.

 

My salary is $58K (eleven years w/same company) with less than $7,000 total debt including auto loan ($1K), student loan($5K) and a credit card($200).  I have about $1500 saved and plan to sell my Jeep when its paid off to amass about $10K down payment.

 

Looking at houses in Irving, TX in the $200K price range, what would my mortgage payment be with taxes and whatnot?  $1250 I assume but not sure about taxes, homeowners insurance, mortgage insurance.

 

Please help me get on the right track for this to work out.  Thanks!


What do you mean 30 and 60 days falling off your report? They have exceeded the 7 year period and falling off the reports? They are now 2 years old and you feel they wont be impacting your score?

What do you mean you have just finished rehabbing your student loans and should be coming off your reports? They have exceeded the 7 year period and falling off your reports? Or you have paid them in full now and feel it should come off your reports? Or you have paid according to your rehab agreement and now still paying your student loan debt?

 

Just because a debt is paid does not mean it comes off your credit reports. Just because 2 years has lapsed since you had 30 and 60 day lates does not mean they come off your credit reports.

 

Once the 7 year period since the initial date of being late passes is when it will be removed from your credit report.

 

The negative remarks have less impact as time goes on but still plays a factor for the entire 7 year time period.

 

In my opinion if the remarks are totally removed you could see a 50 point increase in your scores.

 

In my opinion if the remarks are still present you will not receive any where close to a 50 point increase, unless some other type of change in your report happens.

 

As far as your income goes you should qualify for 200K home. But rates are slowly increasing so YMMV depending on Lender.

 

I have no idea to what taxes and insurance are in your area, so I am no help to assist you with even a guesstimate on how much it would be.

 

Without actually using a calculator a guesstimate on principal and interest would be around 900 a month on 30 year loan. If you are not putting 20% down then you will have MI, and if you are using a governement program you will have other types of fees to also add to your payment. Plus your home owners insurance, taxes, HOA fees.

Good Luck
May all your dreams and wishes become a reality!
Message 2 of 9
JBinBigD
Established Member

Re: Hope to buy first home within next 6 months, what steps and will I Qualify?

Thanks for the reply.

 

Wells Fargo Visa had a 30-day late in May 2011 and auto loan with 30-day then 60-day late in April May 2011.  Payments have been on time every month since, 20 months consecutive.  My CR shows payment history for just the last 24 months, so I assume those late payments will "fall off" in May and only show the past 24 months which have all been on-time.  [Edit:  Just re-checked the reports and see they do in fact record number of times late over 7-year period.  I only noticed the color-coded 24-month chart before]

 

Other than those two, there are just two other accounts on my CR.  One was a Verizon phone bill that was KD but paid in full $110 over a year ago.  The other is a department store cc charge-off from 2006.

 

The student loan was defaulted many years ago, and has not appeared on my CR in several years with any of the three agencies.  I finished a 9-month rehab agreement in December, and the loan guarantor, TGSL, has five lenders that currently pick up rehabbed Sallie Mae loans.  Was paying $500/month wage garnishment plus $25/month voluntary as terms of the rehab.  The remaining balance is $5100.

 

Message 3 of 9
MovingForward_2012
Valued Contributor

Re: Hope to buy first home within next 6 months, what steps and will I Qualify?

No they don't fall of after 24 months. The company that you pulled your report from is only showing you 24 months of history but your full report shows the full 7 years. The lender will pull your comprehensive full credit report that will show your history 7 years back from now. So your score will not go up unless you can GW them to remove the lates. If you get your score to 640 some other way, the UW will want an explanation for every late. They usually have to be at least 12 months old to get approved so you have that. It is just your credit score. What is your balance on your credit card?
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Message 4 of 9
JBinBigD
Established Member

Re: Hope to buy first home within next 6 months, what steps and will I Qualify?

Thanks, that clears up a lot. 

 

My Visa has a balance of about $150.  61-months since opened with one 30-day late which was May 2011.

 

Auto loan has $1100 left on it.  3-year history with six 30-day late and one 60-day.  About to pay it off early though.

 

By the time I apply for mortgage my total monthly debt payments will be about $125.

Message 5 of 9
MovingForward_2012
Valued Contributor

Re: Hope to buy first home within next 6 months, what steps and will I Qualify?

Having $150 on a $200 limit card is tanking your score. If you pay that down to less than 10%, you should see a boost in score. But it probably won't get you to 650. If you want to buy a house in 6 months, you are going to have to start GWing creditors like crazy to get those lates removed.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Message 6 of 9
JBinBigD
Established Member

Re: Hope to buy first home within next 6 months, what steps and will I Qualify?

Thanks so much for the information.  GW= Good Will.  Will read up on how to do that.

Message 7 of 9
MovingForward_2012
Valued Contributor

Re: Hope to buy first home within next 6 months, what steps and will I Qualify?

Yes. Go to the rebuilding forum here and they will help you draft it up to send out. If you do a search on the rebuilding forum about this topic, I'm sure you will find what you need. Don't panic and think all hope is gone because it is not. There have been many success stories here about what you are going to do. Just be diligent and persistent! :-)
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Message 8 of 9
MovingForward_2012
Valued Contributor

Re: Hope to buy first home within next 6 months, what steps and will I Qualify?

You can start calling Brokers now in your area to inquire what their credit score requirements are. Most require a 640, so you should strive for that. If you fall short but are at least at 620 and you found a lender that accepts that you, you should be good to go. If all you can find in your area require a 640, then you know most likely that that will have to be your target.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Message 9 of 9
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