Preparing for Mortgage

Tasbury11 · ‎09-11-2021

My significant other and I are in the process of getting our credit ready to buy our first house. We're looking to buy around Feb/March 2023, but if we are in the position to buy sooner then we will re-evaluate. We're looking at an FHA loan due to scores and lower down payment, but we are open to other options. Is there a goal we need to aim for? I feel like paying off his collections (even if settled) would look better in the long run, but he seems to be set on just letting the last one age and fall off. He doesn't think it would make much of a difference. This is the broad picture so far:

Combined income about $95,000/yr

Me: I'm still rebuilding my credit. It was in the tank and I've got the most problems between the two of us.

Mortgage Scores: EQ- 662 TU-665 EX- 654

Revolving: Credit One- balance $0/$300-on time, no lates

Capital One- balance $26/$400- on time, no lates

First premier- balance $0/$400- on time, no lates

I also have a couple store cards with $0 balances- on time, no lates

Installment: Cap One Auto- balance $11,491- 289/mo (I pay extra) on time, no lates- hope to pay off by June 2023

Member One Auto- balance $28721- $638/mo (will be paying extra once the others are paid-on time no lates (in both of our names)

One Main- balance $1687- $126/mo plan to pay off by Nov 2021

US Dept of Ed- balnce $2206- $50/mo (I pay extra) was previously defaulted but rehabbed about 6-7 years ago- no lates since

I do have 3 personal loans that are paid in full with no lates.

The Bad and Ugly

6 CO's- all paid in full but will be on there till 2024

Original student loan that was defaulted

Plan: Keep letting my accounts ago and pay down installment loans as much as we can.

His: I haven't pulled all of his mortgage scores yet since some of his negatives haven't been taken care of. The one I have is EX: 664

Revolving: Cap One $5/$500 on time, no lates

Credit One $0/$450 on time, no lates

First Premier $0/400 (authorized user on my card- he didn't have any at the time) on time, no lates

SYNCB/BP $0/$1024 on time, no lates

Avant $0/$500 on time, no lates

Installment: Member One Auto $28721- $638/mo on time, no lates

Eagle- paid- no lates

Charge Off: Fingerhut- paid- on report until 2023

Collections: Credit Bureau Systems- medical bill $431 plan to pay on this week. Their policy is to delete within 45 days of full payment

Convergent Outsourcing-Sprint- $1,366 unpaid on report until 2024

Any advice is appreciated. I want to be sure to have a solid plan to get us in the best position possible. Thank you!

Anonymous · ‎09-11-2021

I am by no means an expert as I am going through the process as a first time buyer myself. With scores in the mid 600s you would already qualify for FHA or conventional unless Im missing something. Get any negatives removed that you can and continue to pay down balances and you should be able to get even better rates. A lot of people mention doing what is called the AZEO method before applying to maximize scores. A quick google search can explain it better than I can.

Anonymous · ‎09-11-2021

You also may qualify for down payment assistance depending on where you are buying but your income may disqualify you from that, you should be able to look that up with your states housing agency. The cutoff here is close to your listed income so worth checking out. You can talk to a lender and see if they will do a soft pull to check your credit and see where they have you and any advice they may have

4sallypat · ‎09-16-2021

@Anonymous wrote:
You also may qualify for down payment assistance depending on where you are buying but your income may disqualify you from that, you should be able to look that up with your states housing agency. The cutoff here is close to your listed income so worth checking out. You can talk to a lender and see if they will do a soft pull to check your credit and see where they have you and any advice they may have

Yes, do work with a good mortgage broker - they have the ability to get your scores up and prepare you for the loan.

A soft pull mortgage lender: Better.com has been very useful to see how much we qualified for then shopped around.

Better.com had the best rates but they are difficult to deal with (many different offices all over the nation) and the human behind the company is tough to get ahold of.

We ended up paying a bit more, but going with a local lender (LoanLock) who took our hand and guided us....

CyberChick · ‎09-16-2021

Convergent will delete when you pay in full.