Planning to apply for 1st Mortgage in 90 days...pls help me qualify!!

[Anonymous]

Hello Everyone,

I’ve been lurking around for quite some time and found some great knowledge from these forums. I have been rebuilding my credit for quite some time now thanks to the people at Lexington Law in assisting me in removing all the baddies, Charge-offs, as well as my BK7 from my CR’s. As of Oct’ 14 things have recently turned around where my credit allowed me to be approved for my 1st prime cards, Freedom (4.5K) on Oct and Slate (5K) on Nov. Those approvals were such a rush!!! It didn’t stop there, this turned out to be an apping spree for the next couple of weeks in the beginning of 2015 …I ended apping for 2 Bank of America cards… Americard and Better Balance in January and was approved for 7.5k for each card. Later came my Chase Sapphire (12.5k) a week later and my AMEX PRG and ED cards (2.5K). February came the itch came back so I fell into the hype in aping for another card with Crap 1 Venture one card (3K). At this point I was also got declined for 2 cards, Discover IT card…actually they wanted me to get a cosigner??? I opted to move on with my live with that app…and the 2nd card I was denied for was the Citi Prestige…they said if I didn’t have all these new inq I would qualify but I would need to try again when I didn’t have so much inq on my EXP report…by the way most of these cards were pulled on my EXP report with 12 total Inq, EQX 4 total inq, Trans 3 total inq. Most recently I apped for NASA and was approved for membership and their Rewards Visa (21.2K), soft inq with EXP and like all my other cards NASA was an instant approval. When I started apping back in Oct’14 the Walmart FICO score that I was going by was at 787 with Transunion and now that I’m pulling my scores from Equifax my March scores have taken a dive: EQX 655, EXP 677 and TU 691…I know I should be pulling my scores from this site and I will be making my switch in the month of April after my March membership with EQX ends.

Aside from sharing the roller coaster of emotions of being approved on all these credit cards and realizing the consequences of apping on so much cards would decrease my score. With the research I’ve done around these forums I understand that the main causes of my scores dropping significantly is due to the total inquiries and AAOA. NOW I’m turning to the forum’s knowledge to get some insights in providing me some direction as to how I should plan applying for a mortgage. Below are my stats and I’m hoping ya’ll can give me some information if I will qualify for a Conventional 97 loan or even a regular conventional loan with my scores. I would like to apply for this mortgage in 3 months, I’m no longer applying for any credit cards and focused on getting this mortgage. I have a pretty good job and before all these credit cards I paid everything with my BofA debit cards and now that I have these new cards I have been using them to pay bills to earn the bonus points. I put about 5k on these cards monthly and pay everything in FULL, I didn’t carry or report any balance on the cards. However I have just learned that I should carry at least 1%-3% utility between 2 cards to increase my score, so I will be doing that starting with April statements.

Credit.  Equifax 655, Transunion 677, Experian 691

1 paid/closed auto loans with no late payments, 1 current open autos/motorcycle. $5756/$7348 Balance

6yrs and 6 months Charge-Off 08/2008 $0 balance from Capital One financing and should be coming off this year in September, was removed from TU but still appears on EXP and EQX.

13 Credit Cards:

Slate 5k limit 0 balance

Freedom 4.5k limit 0 balance

Sapphire 12.5k limit $50 balance

Everyday 2.5k limit 0 balance

Gold PRG NPSL 0 balance

BofA Americard $7.5k Limit 0 balance

BofA Better Balance $7.5 limit $10 balance

Capital Venture one $3k limit 0 balance

Nasa Rewards Visa $21.2k limit 0 balance

Express Store Card $1k limit 0 balance

Care Credit $1k limit 0 balance

Walmart $1.8k limit 0 balance

Target $1k limit 0 balance

Income.  My gross for 2014 was 94k

Source of income.  Health insurance company

Down Payment. $20k

Savings. $10k

Monthly debt payments.  I have 1 open auto/motorcycle payments at $175 Monthly, IRS monthly installment $250, NOT A LIEN

Employment. Sr. Business Analyst and have been employed for the same company for 12 yrs

Assets/Reserves.  Currently have $10,500 at Vanguard and growing

Location.  Looking at purchasing a home in Grand Rapids Michigan

Property.  Would like to purchase a single family home with a nice neighborhood and planning to stay there for at least 10 yrs

Value.  House purchase price would ideally be between 300k-350k

Occupancy.  Primary residence, would have at least one roommate. 

Transaction Type.  New home purchase, first time buyer.

Any input from those knowledge about the mortgage process is welcome, thank you everyone for taking the time to read and give your feedback.

@DallasLoanGuy I know your have been providing some lenders insight so input would be appreciated from you thanks.

[Anonymous]

Bump

[frugalQ]

for a conventional loan, you should try to get your mid score to 680 or above....you should be at that mark in 90 days considering you are already at 677.  do not do anything that will alter your credit file.  continue to use your cards as normal, but make sure you pay them off.

the charge off will not be an issue.  the tax installment agreement will not be an issue as long as you pay it monthly and can document it.  the payment will just be included in your DTI ratio.

i'm sure you will have to explain all of the credit card inquiries.

i recommend you qualifying without the potential roommate income.  it will make your process much smoother.

here's a link to fannie mae's eligibility matrix and their seller's guide which contains EVERYTHING regarding fannie mae minimum requirements.

https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf

https://www.fanniemae.com/content/guide/selling/b/index.html

[Anonymous]

@frugalQ thanks for taking the time to give your insights. The tax payment is automatically deducted from my checking each month so I hope thats enough documentation. I just applied for a refi with nasa on my motorcycle which will be bringing the monthly to $89 from $175, do you think that was such a good idea? I figure i can pay off as soon as i close the mortgage..the balance is pretty low.

[frugalQ]

an application to refinance an installment loan is a good thing.  You may take a hit from the opening new account/closing old account, but maybe it will rebound by the time you apply.

At this stage, the only thing you really can do is wait for that magical day when you pull the mortgage app trigger.  

make sure to purchase your mortgage scores again from here either the day before or the same day that you apply....so there will be no surprises

[Anonymous]

**Update 3/30**
Followed fellow myfico members advice from over the weekend. I was concerned with a Capital one auto finance charge off that is due to fall off on 9/2015 would impact my mortgage application. I called Exp office to request to be removed as an early exclusion and exp csr advised me no problem..i should recieve an email confirmation in 24-72 hrs. Now time to try Eqx, I hear they are not so understanding .

[Anonymous]

Hi Skeemen,

It seems like you have given yourself a great foundation! I would recommend getting your middle fico above 700 if you want to go the conventional route. Every 20 points really makes an impact (with the best rates coming at 740 or 760, depending on the lender)! Getting that collection off your report should definitely help, as will letting your accounts season for a bit.

If you are having trouble getting your credit scores up, you can always go the FHA route and refinance down the road. Taking the MIP (mortgage insurance) rate reduction for FHA loans at the beginning of this year into account, pricing for FHA and conventional loans aren't too far apart unless you are:

A) putting 20%+ down (to get rid of MIP/PMI) and

B) have excellent credit

Let me know if you have any further questions .

[Anonymous]

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@Anonymous wrote:

Hi Skeemen,

It seems like you have given yourself a great foundation! I would recommend getting your middle fico above 700 if you want to go the conventional route. Every 20 points really makes an impact (with the best rates coming at 740 or 760, depending on the lender)! Getting that collection off your report should definitely help, as will letting your accounts season for a bit.

If you are having trouble getting your credit scores up, you can always go the FHA route and refinance down the road. Taking the MIP (mortgage insurance) rate reduction for FHA loans at the beginning of this year into account, pricing for FHA and conventional loans aren't too far apart unless you are:

A) putting 20%+ down (to get rid of MIP/PMI) and

B) have excellent credit

Let me know if you have any further questions .

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Dpeezy,

thanks for providing some sound advice. The fha limit in the location we are looking at is 271k and the homes we are looking are between 300k-330k.

With only 20k down and with our timeline for the summer we would not be able to raise enough for the house that we want.  Unless, there is something

I dont kno about fha loan that would allow me to purchase a home more than 271k.

I'm hoping that I can get my score above 700 before i apply for the loan...no mistakes and continued on time payments....gardening ti' 3/2016

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Hi Skeemen,

It seems like you have given yourself a great foundation! I would recommend getting your middle fico above 700 if you want to go the conventional route. Every 20 points really makes an impact (with the best rates coming at 740 or 760, depending on the lender)! Getting that collection off your report should definitely help, as will letting your accounts season for a bit.

If you are having trouble getting your credit scores up, you can always go the FHA route and refinance down the road. Taking the MIP (mortgage insurance) rate reduction for FHA loans at the beginning of this year into account, pricing for FHA and conventional loans aren't too far apart unless you are:

A) putting 20%+ down (to get rid of MIP/PMI) and

B) have excellent credit

Let me know if you have any further questions .

---

Dpeezy,

thanks for providing some sound advice. The fha limit in the location we are looking at is 271k and the homes we are looking are between 300k-330k.

With only 20k down and with our timeline for the summer we would not be able to raise enough for the house that we want.  Unless, there is something

I dont kno about fha loan that would allow me to purchase a home more than 271k.

I'm hoping that I can get my score above 700 before i apply for the loan...no mistakes and continued on time payments....gardening ti' 3/2016

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No problem, I am happy to help. That is unfortunate regarding the FHA loan limits in your area. Since you cannot piggyback an FHA loan with a conventional loan to get around the loan limit, your only other option is a downpayment "gift" from a family member.

If this is not realistic in your situation, conventional looks like it may be the only way to go!