Need some recommendations

[Anonymous]

I am currently a Texas home owner and used a FHA loan to purchase my home, Well fast forward a few years add a wife and kids and now we are needing a larger home. We are a 2 income house hold but most of the income and debt is mine and puts our DTI at 16%, based off our tax returns we "net" 148k a year. My middle is 591 and hers 669. I am having diffulculty trying to find a lender that will work for me. I know 620 is kind of where I need to be at but after getting rid of my boat and other debt my scores jumped a whopping 1 point on experian (20k). I am juggling between selling or keeping my current property as a rental also

Option 1,will be to pay off my credit card debt but then that will lower my cash to put down.

Option 2, Refi my current property to be able to absorb some of the credit card debt and rent it out (50k ish equity at 80%LTV, would need 15k) 

Option 3, find a sutible lender for 275k loan for new property and still keep my current loan as rental 

[NC_Mtg_Loaner]

Any idea why you are generating a 591?

I would seriously recommend researching the possibility of building that score while you are searching for a solution to this conundrum.   In the event you don't find a solution perhaps you'll get yourself out of the sub-600 range which may allow you to move forward.

[Anonymous]

I have 4 collection accounts, Syncrony bank on Exp, Mid land credit EQ x 2, Cap 1 charge off TU & Exp totals to about 18k 

mortgage scores are EQ645  TU591  EX566

[JVille]

You need to deal with those issue in order for your score to recover. Sorry

[Anonymous]

FYI: Midland will delete after paying in full on accounts over two years old so that one is potentially a given if you can afford to PIF right now. 

Good luck!

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@Anonymous wrote:

I have 4 collection accounts, Syncrony bank on Exp, Mid land credit EQ x 2, Cap 1 charge off TU & Exp totals to about 18k 

mortgage scores are EQ645  TU591  EX566

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Tracy (sempermom)

[Anonymous]

The pricing you are going to pay on an FHA loan as well as lifetime MIP is going to be insane. Some lenders will give FHA loans out to 580 or above borrowers but with the current climate almost all lenders have put serious restrictions on qualifying.

How old is your derogatory credit? Like anything that has a late on it especially installment debt? You can't have installment lates in the last 12 months and are alotted 1x30 in months 13-24. Anything 1x60 and you're dead in the water for FHA if you're a manual which is extremely likely.

My recommendation as a neutral party is to honestly get your debt load taken care of and improve your score in the short term. If you are carrying debt netting almost $150k a year, serious self-reflection is needed on your spending habits and once that is under control you should be able to save aggressively to purchase a $275,000 home quickly.

[VALoanMaster]

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@Anonymous wrote:

I am currently a Texas home owner and used a FHA loan to purchase my home, Well fast forward a few years add a wife and kids and now we are needing a larger home. We are a 2 income house hold but most of the income and debt is mine and puts our DTI at 16%, based off our tax returns we "net" 148k a year. My middle is 591 and hers 669. I am having diffulculty trying to find a lender that will work for me. I know 620 is kind of where I need to be at but after getting rid of my boat and other debt my scores jumped a whopping 1 point on experian (20k). I am juggling between selling or keeping my current property as a rental also

Option 1,will be to pay off my credit card debt but then that will lower my cash to put down.

Option 2, Refi my current property to be able to absorb some of the credit card debt and rent it out (50k ish equity at 80%LTV, would need 15k) 

Option 3, find a sutible lender for 275k loan for new property and still keep my current loan as rental 

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Hi @Anonymous,

Given your credit scores, an FHA loan is your only option. That can make things a little more difficult because there only a couple of scenarios where FHA will allow you to have more than 1 FHA loan at a time. 

One is an increase in family size.

Here are the FHA guidelines for it:

A Borrower may be eligible for another house with an
FHA-insured Mortgage if the Borrower provides
satisfactory evidence that:
• the Borrower has had an increase in legal
dependents and the Property now fails to meet
family needs; and
• the Loan-to-Value (LTV) ratio on the current
Principal Residence is equal to or less than 75% or
is paid down to that amount, based on the
outstanding Mortgage balance and a current
residential appraisal.

In my opinion, you should use the money you have to pay off/down your debt & sell your current place. You can use the equity from the sale as your down payment on your new home.

You can do a back to back closing so you only have to move once.

As a lender, I would run some what if simulators to see what accounts on your credit need to be paid off or down to give you the highest scores.

[Anonymous]

Thank you for the information, I am currently bringing those balances down