Mortgage Journey

[Cipher360]

Hello all. So the roller coaster of a journey into my our new home has started. Roller coaster of emotions that is. I expected this. But perhaps I have time on my hands. But not sure. So here is the latest. My scores have come up quite a bit. My mid score was at 613 when I started this Journey in April. Today my mid score stands at 676 with another increase expected when Amex reports the 2,700 payment I made last month which brought my Uti down to about 3% score simulator my LO provided says it should go up some more. Ok so here is reason for my post.
So the Builder of the home wanted me to try their preferred lender. So I did. Everything seemed to be going ok. With the new LO looking at my credit file and saying everything looked ok. We spoke about my derogatory items on my credit and I explained what happened in 2016. Being self employed business dropped in 2016. With companies being 30,60 90 day net in paying me, I was late with everything. I let about 5 cards close but I did pay the balances off in 2017/18, less than what I owed, but paid them and they show zero balances. Last late was beginning of 2017 which was when I finally caught up to everything. Everything has been perfect since. I kept my American Express blue card and have always kept up perfect with that one. I have old credit history which shows as good but just closed accounts that I closed years and years ago.
So I get an email from the New LO yesterday saying she has hit a wall and that she can’t get an Automated Approval with even 25% down. She says it’s because of the past credit issues. She asked if I had a coBorrower. I told her my wife does not work and her credit will not help. She asked about someone else and that at this point income didn’t matter for the co-borrower. I was thrown off by the request because I do not want to involve anyone else and why would they want a coBorrower just to get it through automated approval? Without verifying income? I know I have a challenge ahead of me and one I’m going to have work hard to accomplish, but I thought that older derogatory items, though looked at, questioned and not good, were not as impactful as much as newer activity. Am I looking to buy a home too soon? Should I have waited longer? The roller coaster of emotions I can handle if it has a good outcome. But if I’m being unrealistic and I go thru this journey, sell my current home, move into temporary apartments and then everything falls through. It will not be good. Looking for some encouraging words or a reality check. My house won’t be completed until December. What can I do to better my chances.
Credit scores stand at
Eq-699 TU-676 Eq-640
One credit card
American Express- 10,000 limit balance $381.00
Wells Fargo home Mortgage- last late pay was beginning of 2017.
Wells Fargo Auto- perfect pay
Honda Finance- perfect pay
Rest are good closed accounts and then my
Closed bad accounts.

Thanks in Advance

[NC_Mtg_Loaner]

Can't you simply go back to your preferred lender?

You still have 6 months to continue 'working' on things and improving your status (loan profile) as long as it DOES continue to improve than just go ahead and use your own Lender.

A builder's preferred lender often times will be more conservative because they can't afford to be wrong if there's any chance of your loan profile taking a turn for the worst.   They are basically telling the builder to go ahead and spend XX amount of money to build your home but then if it doesn't close what are they going to do?   

[Cipher360]

Yes, I was planning on calling my original Lender. This just kind of took the air out of me and ruined my weekend lol I hate bad news and I’m a worry wart by nature. This is truly my dream home I’m building.
What is up with her asking for a coBorrower and no income needed at this point? The last thing I want to do is ask anyone to co-sign for a house. Lol I wouldn’t even know how to ask.
I just don’t want to go down this road and be disappointed at the end. If I need to wait another year. Though it would suck. I’ll do it just to be sure I’m not getting my hopes way up high and then be disappointed at the end. Not the ideal thing but I do know it happens.
How do UW see old closed accounts. I was going to be proactive and write a narrative of what happened in 2016 and what I am doing for it not to happen again. I’ve heard UW ask for this sometimes and perhaps being proactive will avoid issues.

[NC_Mtg_Loaner]

What kind of loan have you been pre-approved for already?

[Cipher360]

Well there is a hold up with my 2018 Tax returns. I’m self employed and my corporations taxes aren’t usually filed until Octoberish... soo we gave our Lender a temporary profit and loss etc etc so she can give me a “verbal ”. She says there are a couple of ways to do it. she did get an automated approval with 20% down and 20k in reserves which is easy for me. But she can’t give me a preapproval until I get my taxes in.
She also mentioned an 80-10-10 where with a 680 score, they will only lend 100k for the second lean. Which with the price of my House (650k) was perfect. She didn’t run that thru automatic approval. I did like that scenario. Because it’s less money down out of my pocket. Though I am prepared for 20% down. I am going to get 100k from the sale of my current home that I’ve been living in for 18 years.