No Clue where to start..

Anonymous · ‎01-24-2015

Okay so I just started cleaning up my report, and have made some major improvements. I didn’t have much debt, just things here and there that I let slip past me. My scores right now are sitting at EQ 577 TU 593 and EXP 588 per myfico.com. I have 7 Revolving account loans, with 4 accounts posting negative but all paid (some paid in full, some not) And only one Credit One Card for 500$ limit with a 30$ balance. I also just got approved for a 1500$ capital one card, but I’m waiting for it in the mail.

I have 4 installment Accounts listed on my report paid perfectly with only 1 still open with a 15k balance for my truck. I have 4 collections paid listed on my report as well and 1 Paid civil judgment and a handful of inquiries.

So now that we know what my report looks like this Is what I am trying to do. I’m trying to see if I even could qualify for a house. I have 30k saved in the bank and have never purchased a house before. I know my score is still low, but I still would like to see what a mortgage officer would say, I just don’t know where to start. Could I get approved? Is it worth a shot? And if so, what loans should I be looking for? I live in VA and make a salary of 60k, but wanting to purchase a home in TX. Can you purchase a house out of state while still working in another? I have friends who would rent it out for me, until I move there next year. If someone could just guide me into a starting point that would be fantastic. I know the FHA loans are a good shot, but since I have the money for a down payment, I’d rather do a conventional loan, unless it makes absolute sense to FHA it. Oh and the house I would be looking for would range around 175k.

Please let me know if you need any more information!

frugalQ · ‎01-25-2015

I believe you need a 640 for conventional. Maybe you can write good will letters to the CA asking them to delete the collection account from the credit bureau.

Other than that, it appears that it will be a waiting game for your scores to increase.

Good luck!

Anonymous · ‎01-26-2015

.I think yours would be case.of someone just looking over your file with patience. A 30k cash reserve is not exactly chump change, and 60k is a good salary. Your installment loan payments have been good. Past history with revolving credit appears to be the culprit with your sub 600 scores, but from what I read the problem has been dealt with, and now

just hanging around causing trouble.

A person might take a look at all that and weigh stuff up. and float the note (depending on how much). You won't get the best terms however. Lets say you're looking at a 200k home. A 30k downpayment and 60k salary, with recent good credit activity might be enough for a lending firm to do the loan. You're most definite looking at a FHA loan.

If time is not a factor you'd benefit greatly with another year of cultivation, and get your scroes into the 6s.

StartingOver10 · ‎01-27-2015

@Anonymous wrote:
Okay so I just started cleaning up my report, and have made some major improvements. I didn’t have much debt, just things here and there that I let slip past me. My scores right now are sitting at EQ 577 TU 593 and EXP 588 per myfico.com. I have 7 Revolving account loans, with 4 accounts posting negative but all paid (some paid in full, some not) And only one Credit One Card for 500$ limit with a 30$ balance. I also just got approved for a 1500$ capital one card, but I’m waiting for it in the mail.

I have 4 installment Accounts listed on my report paid perfectly with only 1 still open with a 15k balance for my truck. I have 4 collections paid listed on my report as well and 1 Paid civil judgment and a handful of inquiries.

So now that we know what my report looks like this Is what I am trying to do. I’m trying to see if I even could qualify for a house. I have 30k saved in the bank and have never purchased a house before. I know my score is still low, but I still would like to see what a mortgage officer would say, I just don’t know where to start. Could I get approved? Is it worth a shot? And if so, what loans should I be looking for? I live in VA and make a salary of 60k, but wanting to purchase a home in TX. Can you purchase a house out of state while still working in another? I have friends who would rent it out for me, until I move there next year. If someone could just guide me into a starting point that would be fantastic. I know the FHA loans are a good shot, but since I have the money for a down payment, I’d rather do a conventional loan, unless it makes absolute sense to FHA it. Oh and the house I would be looking for would range around 175k.
Please let me know if you need any more information!

I see a couple of issues:

you want to buy a home out of state so you would have to not buy it as a primary residence, but as an investment property (can't be primary if you don't live there)
investment property loans require a higher credit score and larger down payment than primary residence loans
your salary in Virginia won't help you with a primary home purchase in Texas
there is a possibility you could qualify for a "second home" type purchase with higher scores - even though you haven't purchased your first home.

I don't know of any conventional lender that will go to a sub 600 score for an investment property, unless you go with private funding or hard money. The rates and terms for either private loans or hard money are substantially higher. You would need to put down a minimum of 35% for hard money and the interest rate is high.

It would be tough to impossible to get financing for a 'secondary/vacation type home' purchase with your current scores. But possible if you could get the scores at least into the mid-600s (someone else will have to provide specifics). You would be better off going to the rebuilding forum here to see what you can do to increase your scores. You are on the right track by picking up another credit card. See what you can do to 'good will' the collections off the report. That will help you too.