Mortgage denial

[wallacecody25]

Hello forum! Appreciate all the great info here. As the title shows, recently denied by a local mortgage company and NFCU. Im curious how long I should wait before reapplying?. My mortgage FICO scores are 604, 639, 649. 3 new credit cards since December 2018

I recently went through a rebuild phase, and still have a collection showing on TransUnion. I negotiated a PFD for the collection but it came back on. I called the company and they sent me a letter showing where it was requested to be deleted. Before that collection popped back on my middle score was right at 650. I do have late payments within the last few months on a charged off first premier account, but it's showing paid now.

I make 72,000 with a $350 car payment and $110 student loan. My credit card util is at 3%.

How long should I wait until I reapply?

[Anonymous]

Did they give you the reasons you were denied

[NC_Mtg_Loaner]

Yup, find out WHY they denied you and go elsewhere.

[wallacecody25]

Nfcu denied me because of the collection even though I uploaded supporting documents showing the request for removal.

The local LO denied me for the same reason.

The collection is only 300 bucks. I thought collections were ok under 1,000. Am I missing something here?

[Anonymous]

It was likely the recent lates that did it.  How recent was you last late?

[wallacecody25]

I had 2 charged off accounts that are showing failed to pay until March of this year.

Auto loan 30 day late December 2018.

[homeloanexpert]

On VA loans specifically, the threshold is really 12 months "no lates". The two recent charge offs are not a good thing, but not an issue as they are past the 12  months. The recent auto loan late in December was most likely the deal killer. It's the worst time to be late. Many Underwriters know that having late payments in Dec and January are usually a result of poor financial planning due to the holidays. I have however, been able to work around (1) single late where is was isolated and non-recurring from year to year. Last loan I closed with the same circumstances as yours, I was able overcome by writing a detailed LOE (letter of explanation) stating that an automatic debt was settle up to avoid a late while the borrower was going to be out of town on Christmas Vacation, and sure enough there was a glitch in the system and the auto debit was not taken out of the account. In the LOE it went on to explain that the glitch was corrected and the evidence was in the most recent 2 months bank statements) and we were good to go.

Best wishes to you.

[wallacecody25]

Yeah, my late payment wasn't a glitch. You hit the nail on the head. Poor planning on my part. I tried Goodwill letters with cap one on the late auto but they won't budge.

So, how long should I wait before reapplying?

[homeloanexpert]

If you don't want to take on the battle again and quite possibly end up with another denial, then  I would recomend waiting till 01/01/2020 so the AUS (automated underwriting system) doesn't pick up that late as still within the last 12 months. Don't worry, the time will pass quickly and most certainly, work on bringing up your scores if you can by  keeping your credit utilization low (never zero and never over 30%) and maybe even add a Authorized User account or a new one.

Best wishes to you!

[wallacecody25]

Thanks for the reply! That's what I was thinking as well. Really the only reason I applied was because my scores jumped up so quickly during my rebuild. My original plan was to apply around December anyway, so im not butt hurt about the denial.

Oldest account 10 years and average age is around 4 years.

I have 4 new credit cards all in good standing never late. 2-4% utilization
1 auto loan
1 student loan

I do have a previous mortgage from 2012-2016. Never late.


All of these are in good standing and im 100% committed to keeping that way. Probably the best descision I've made was to build up savings for emergencies.

I wanted to apply for a CLOC r another cc with nfcu next month at my 91/3.
Would you suggest against that?