Mortgage Prep questions!

[amclaughlin42]

I am looking into getting FHA 203k for a fixer upper my in-laws own. But I want to make sure my mortgage scores are as good as they can possibly be. I am wanting apply as soon as possible but itll probably 6 months to a year atleast.

When should I stop applying for new credit?

Which affects credit the most revolving or installment debts?

I have student loans that are in Repayment with a monthly payment of $0

I also have a new personal loan - 2 months old currently. Itll take 3 years to pay off by making the minimum payment, I do have the ability to completely pay it off, but I would like to not do that and put the bulk payment towards a down payment so I can increase my payment history.

I have no credits in my name

I am the authorized user on my wifes card which is carrying a high balance, but is being paid off at the end of February. 

Would it be wise to get another installment loan prior to applying for mortgage with it being far enough out? 

My car is getting towards then end of its life and I will need a new one in the next year or so. 

But the mortgage will come first. 

I need the best advice for mortgage score improvement

[AllZero]

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@amclaughlin42 wrote:

I am looking into getting FHA 203k for a fixer upper my in-laws own. But I want to make sure my mortgage scores are as good as they can possibly be. I am wanting apply as soon as possible but itll probably 6 months to a year atleast.

When should I stop applying for new credit?

Immediately

Which affects credit the most revolving or installment debts?

Both

I have no credits in my name

Not good

I am the authorized user on my wifes card which is carrying a high balance, but is being paid off at the end of February. 

Not good for scoring if done now. Okay if showing 8.9% utilization or less by time report is pulled.

Would it be wise to get another installment loan prior to applying for mortgage with it being far enough out? 

No

My car is getting towards then end of its life and I will need a new one in the next year or so. 

But the mortgage will come first. 

Yes

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See short comments in red.

[dragontears]

1. You should stop applying now unless really have no cards in your own name
2. FHA will used 1% of your student loan balance in your DTI
3. Whether or not you should pay off the personal loan depends on your current DTI
4. Revolving credit has a bigger effect on scores than loans
5. Getting another loan will only lower your score not increase it
6. What are your current mortgage scores? FHA doesn't have interest rates tied to score once you reach the minimum for 3.5% down

[AllZero]

Do you have any derogatory or delinquency that is suppressing your scores?

Ideally, you should have 3 open revolving accounts (credit cards) that you are the primary account holder and 1 open installment loan (which you have).

6 months is a relatively short amount of time to build your credit profile. It is possible.

What is your current AoYA Age of Youngest Account?

What is your current AAoA Average Age of Accounts?

Are you able to open your own credit cards?

[amclaughlin42]

What is the best way to determine DTI?

My installment loan is only 2 months right now. Its my youngest account

My AAoA is 3 years and 3 months

I originally wasn't planning on buying a house right now.

This oppurtunity just kind of fell into my lap right now. 

But it problably would be closer to a year before for mortgage approvals. 

I want to save as much as I can for my mortgage. 

I don't think it will be very idea for me, to have 3 open credit cards in that time, but one is very possible.

I have been rebuilding 3 1/2 years after a job loss during wrongful termination. 

I am able to open my own credit cards, I am not a fan of using CC which is why I havent done it. 

But if it will help so I can own my own home one day soon than thats what I will do.

Is it more beneficial to have zero balance or carry a small one? 

[AllZero]

Do you have any derogatory or delinquency?

It's recommended not to incur inquiries or new accounts 12 months leading up to a mortgage application.

However, since you have zero revolving accounts of your own, you aren't able to maximize your scoring potential.

Even though you aren't a fan of using CCs, it's a necessary tool to prop up your score. You can always set one for a re-occurring monthly charge. e.g. Netflix. Set your payment for autopay.

Look into AZEO All Zero Except One card reporting a balance. e.g. $5-$10. You don't want to carry a balance. You want to report a balance, then pay in full / pay to zero to avoid interest charge.

Free mortgage scores

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?