Need help finding a mortgage lender for a refi!

[Anonymous]

I feel like I'm trying to hit a moving target!

A little back-story... we moved into our current house in '08 and rented for almost two-years. Shortly after moving in, my husband lost his job. Thankfully, he wasn't out of work long, but it was long enough to put a hurting on us and make us fall behind on most things. I feel like I've been playing catch-up ever since. Then owners decided to sell before the 24-month mark so they wouldn't have to pay capital gains taxes.  They wanted us to buy (and we wanted to - we love our house!) but we knew our credit was screwed and we wouldn't qualify for a mortgage. They decided to finance the house for us. It was set up as an interest-only loan with a balloon due in '14. However by 2014, we still had not managed to fix our credit (why didn't I find this forum sooner?!) and we still couldn't qualify for a mortgage. They gave us an extension. January of this year, our scores were up to mid 560s. My husband talked to a mortgage person (Credco? or something?) and they said if we could get it to 580, they could help us get a mortgage. Fast-forward to this week... my husband's score is now 579 (Experian), 583 (Equifax), 574 (TU).  He has one CC with a $300 CL and it had a $130 balance. I just PIF today.

My scores are 607 (Experian), 611 (Equifax), 610 (TU). I have a $800 CL and owe $72.

So... we called a mortgage person yesterday and asked her about our refinancing options. We were hoping that we could refinance through a USDA loan (no money down and according to their website, no minimum credit score) but she said no, they ONLY refinance USDA original loans (not a private lender loan). We then asked about FHA, and she said we don't qualify - minimum is 640.

Three months ago we were told 580, now that we are there, we are told 640. We are going to lose our house in May if we don't refi this time! Any recommendations or advice?

I'm trying, I really am! But I'm still a little clueless in how to fix this, and now I'm becoming frustrated at trying to hit a moving target!

Thank you for listening!   :-)

[Anonymous]

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@Anonymous wrote:

I feel like I'm trying to hit a moving target!

A little back-story... we moved into our current house in '08 and rented for almost two-years. Shortly after moving in, my husband lost his job. Thankfully, he wasn't out of work long, but it was long enough to put a hurting on us and make us fall behind on most things. I feel like I've been playing catch-up ever since. Then owners decided to sell before the 24-month mark so they wouldn't have to pay capital gains taxes.  They wanted us to buy (and we wanted to - we love our house!) but we knew our credit was screwed and we wouldn't qualify for a mortgage. They decided to finance the house for us. It was set up as an interest-only loan with a balloon due in '14. However by 2014, we still had not managed to fix our credit (why didn't I find this forum sooner?!) and we still couldn't qualify for a mortgage. They gave us an extension. January of this year, our scores were up to mid 560s. My husband talked to a mortgage person (Credco? or something?) and they said if we could get it to 580, they could help us get a mortgage. Fast-forward to this week... my husband's score is now 579 (Experian), 583 (Equifax), 574 (TU).  He has one CC with a $300 CL and it had a $130 balance. I just PIF today.

My scores are 607 (Experian), 611 (Equifax), 610 (TU). I have a $800 CL and owe $72.

So... we called a mortgage person yesterday and asked her about our refinancing options. We were hoping that we could refinance through a USDA loan (no money down and according to their website, no minimum credit score) but she said no, they ONLY refinance USDA original loans (not a private lender loan). We then asked about FHA, and she said we don't qualify - minimum is 640.

Three months ago we were told 580, now that we are there, we are told 640. We are going to lose our house in May if we don't refi this time! Any recommendations or advice?

I'm trying, I really am! But I'm still a little clueless in how to fix this, and now I'm becoming frustrated at trying to hit a moving target!

Thank you for listening!   :-)

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640 is a lender overlay - many lenders can do FHA at 580. Do you have any equity?

[Anonymous]

We had an interest-only loan, so no equity from that. However we believe the value of our house has risen, and we may have some equity (maybe 5%?) from the value vs loan amount. Does that count?

[Anonymous]

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@Anonymous wrote:

We had an interest-only loan, so no equity from that. However we believe the value of our house has risen, and we may have some equity (maybe 5%?) from the value vs loan amount. Does that count?

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Yes, an increase in value counts as equity. The reason I ask is because you likely won't be able to do a refinance if you are underwater. Do you know any realtors who may be able to run comps for you before you pay for an appraisal?

[Anonymous]

I know one and asked her last night, but she said she is too busy right now. :-/

[Anonymous]

I just left a message for a different Real Estate Agent. I'll let you know what she says when I hear back!

[BrianB_The_Loan_Professor]

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@Anonymous wrote:

I feel like I'm trying to hit a moving target!

A little back-story... we moved into our current house in '08 and rented for almost two-years. Shortly after moving in, my husband lost his job. Thankfully, he wasn't out of work long, but it was long enough to put a hurting on us and make us fall behind on most things. I feel like I've been playing catch-up ever since. Then owners decided to sell before the 24-month mark so they wouldn't have to pay capital gains taxes.  They wanted us to buy (and we wanted to - we love our house!) but we knew our credit was screwed and we wouldn't qualify for a mortgage. They decided to finance the house for us. It was set up as an interest-only loan with a balloon due in '14. However by 2014, we still had not managed to fix our credit (why didn't I find this forum sooner?!) and we still couldn't qualify for a mortgage. They gave us an extension. January of this year, our scores were up to mid 560s. My husband talked to a mortgage person (Credco? or something?) and they said if we could get it to 580, they could help us get a mortgage. Fast-forward to this week... my husband's score is now 579 (Experian), 583 (Equifax), 574 (TU).  He has one CC with a $300 CL and it had a $130 balance. I just PIF today.

My scores are 607 (Experian), 611 (Equifax), 610 (TU). I have a $800 CL and owe $72.

So... we called a mortgage person yesterday and asked her about our refinancing options. We were hoping that we could refinance through a USDA loan (no money down and according to their website, no minimum credit score) but she said no, they ONLY refinance USDA original loans (not a private lender loan). We then asked about FHA, and she said we don't qualify - minimum is 640.

Three months ago we were told 580, now that we are there, we are told 640. We are going to lose our house in May if we don't refi this time! Any recommendations or advice?

I'm trying, I really am! But I'm still a little clueless in how to fix this, and now I'm becoming frustrated at trying to hit a moving target!

Thank you for listening!   :-)

---

580 is still low - most banks that do a loan with a score in that range will want to see 10% equity

FHA and USDA do not have the same requirements - USDA now requires a 640 - also USDA is for purchase loans or refinancing of an exsisting USDA loan - 

If you had the 640 score you might be able to show you have been renting and now ready to buy making it a purchase loan -it would depend on how your contract is structured with the seller

FHA is your best option but you are still at the very bottom score wise and will need to have a very soid profile otherwise before it will be approved - 

I have seen multiple people come on to the boards and talk about getting started with a lender that says they can do the 580 loan but I have yet to see any of those people follow up and share anything about actually closing their loan - the few I have seen get through had exceptional debt to income and large assetts for reserve funds. 

If you can get the score up to 600 I think your chances go up considerably

What is it that is holding his score down?

Mortgages require scores but the credit also needs to show recent positive credit - you are allowed 1x30 within the last 12 months or 2x30 -1x60 within the last 24 months - 

BrianBTheLoanPROfessor