cancel
Showing results for 
Search instead for 
Did you mean: 

Mortgage Application - Late Payments

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

Mortgage Application - Late Payments

I’m wondering if anyone here can give me advice or share past experience with their mortgage loan application.

My wife and I are currently in the process of selling our home and signing a contract to build a new one. We have our pre-qualification in hand (they pulled my credit scores when they did the pre-qualification). We both have high incomes and our DTI isn’t an issue as we’re applying for a loan that’s about $90,000 less than what we were pre-qualified for.

My wife’s credit is fine. She’s never missed a payment in her life. Mine is a different story.

I’ll start with the good: I haven’t had any late payments in 3 years. My credit utilization is very low (under 10%), and I’ve never missed a payment on a secured loan in my life. My auto loan history is perfect, but I’ve never had a mortgage in my name.

Now the bad: When I was getting ready to graduate college my dad passed away unexpectedly. He was the primary breadwinner between my parents, and I was relying on him to help with student loan payments. Without him I got in some trouble. I had several 90 day lates on credit cards, and maybe one or two on my student loans. The last of these came in early 2016. I’m at 37 months without a missed payment and the rest of my profile is good.

My FICO 2-4-5 was 683-695-707 when they pulled it last week. My score isn’t an issue. My fear is that when it gets to underwriting my previous history of letting my credit cards fall behind will derail the application. I’ve read that they look for 12-24 months of clean credit, but could my past come back to bite me here? I’m afraid of selling our current home only to find out we can’t get qualified right now.

EDIT: I just want to add that I have no collections showing on my report. I did have some medical debt that went to collections but that was paid and has since fallen off my report all together.
Message 1 of 11
10 REPLIES 10
Regular Contributor

Re: Mortgage Application - Late Payments

You are perfectly fine and have nothing at all to worry about. You should rest peacefully with your current credit situation!

Message 2 of 11
Member

Re: Mortgage Application - Late Payments

Thanks for the reply! I do want to add that after looking over my report I do see that a couple of those payments are showing as 120 days late. They didn’t go to collections or anything, but they show 120 days. Does that change anything?
Message 3 of 11
Valued Contributor

Re: Mortgage Application - Late Payments

You will need to write a letter of explanation about those late payments And explain what was going on and the lessons you have learned. Might as well put together a brief and contrite LOE you will need it.
Message 4 of 11
Regular Contributor

Re: Mortgage Application - Late Payments

Like Jville said, might want to prepare a letter. Otherwise, you have nothing to worry about.

 

I'm in a similar situation -- selling, then building new, and my past is more checkered than yours. I was pre-qual'd too, and not going to sweat it.

Jun 2019: EQ 713, EX 693, TU 708 (Mar 2017: 550's)

AAoA: 8.6 years, Gardening Goal: Spring 2020
Message 5 of 11
Member

Re: Mortgage Application - Late Payments

Thanks for the feedback. I will work on that now so it’s ready if/when I need it. You don’t think (in your opinion) that it could get in the way of an approval, though? My LO reviewed my credit report and said she didn’t see anything that she thought would be an issue, but she’s not an UW so I’m not sure how much she’d know about it.
Message 6 of 11
Regular Contributor

Re: Mortgage Application - Late Payments

LO's know a boat-load about UW because they usually earn a commission based on their approvals!

 

I was pre-qual'd with a 14 month clean track record... you at 36+ might as well start shopping for welcome mats!

Jun 2019: EQ 713, EX 693, TU 708 (Mar 2017: 550's)

AAoA: 8.6 years, Gardening Goal: Spring 2020
Message 7 of 11
Member

Re: Mortgage Application - Late Payments

Thanks for your feedback. I’ve worked hard to get my finances in order and I feel good about it. I just can’t wait until another 3/4 years go by and my slate is clean.

Congratulations in advance on your new home! I hope all goes well.
Message 8 of 11
Valued Member

Re: Mortgage Application - Late Payments

Are we talking about conventional loans or FHA?
Message 9 of 11
New Member

Re: Mortgage Application - Late Payments

Regarding late payments .. when I applied usda I only had one credit score so I have to use alternative tradelines ..such as utilities . I know you cant have any 30 days late .. but if it's less than 30 days late.. would they be able to use that ?
Message 10 of 11