Refinance with less than perfect credit

[Twotimesacharm]

Settle in! This is a long one (lots of data points though)

I have a USDA loan that I obtained in June of 2017. In November of 2018, we lost the home to fire. 2018 was not a good year for us as my husband lost his business at the back end of 2017 and we used up our savings trying to keep up with the bills. Needless to say, almost all of my accounts defaulted and were charged off. I have paid all of them, either settled after charge off or PIF after charge off. Three credit cards and one auto loan are still on my report (showing paid/settled from end of 2018 or beginning of 2019). I have three solid NO's for goodwill letters, and one hopeful (Cap One).

My original mortgage has two 30 day lates, March and June of 2018 (I have sent two Goodwill requests, but Ditech is going through bankruptcy and I have yet to here back from both letters sent months apart). 

The new mortgage shows two 30 day lates that are being rightfully disputed from April and May of 2020 (long story, but it's incorrect). 

As of now, I have seven accounts with perfect payment history, two of which are closed auto loans from 2017 and 2020.

I have five cards open with perfect payment history

One is a Cap One, opened in 11/2014, authorized user with a 3,500 limit, 0% Utilization. (I am the only one who uses it, but unfortunatelythat doesn't show!).

One is a secured WF (opened 1/2019) with a 2k limit, graduating in June (yay!) 25% utilization 

Two First Premier (I know, I know), opened in 2014 and 2015, 300 and 400 limit, 0% utilization 

One Amex, opened 11/2020, 1,000 limit, 35% utilization (I pay in full every month)

Now, the mortgage is in my name with my mother as a co-borrower (she lives with us). She has good credit, scores around 700. No lates on any cards and just paid off car loan.

My March FICOs are EX: 649 EQ: 673 TU: 650

My mortgage had been on a COVID hold since June of last year and that will end June of this year. I expect the new house to be finished by then and believe the new value will be around 600k. I have 330k on my current loan. My question is; do I have a chance at a good re-fi? Or am I stuck with this loan and this bank? I hoped the new loan to value would be a selling point.

[tooleman694]

What is covid hold? Does that mean you have not been paying the mortgage?

[Twotimesacharm]

My husband was not able to work due to COVID up until recently so we had deferred our payments under the CARES Act. Our county was hit hard but just recently started opening up so we are in the position to resume payments

[SandyNC]

I spoke to a lender about a refi in March 2021.  My income now is not enough to refi.  They did tell me they would do a refi with a 620 with strong Debt to Income ratio.  They prefer 640 as a low score.  Hope you have made some progress 🌻

[JVille]

My opinion, you need two years of clean Mortage pmt history with NO other late pays in any CC or obligation. That's 2 yrs moving forward. That's just how I see it but not everyone would agree. Good Luck to you!

[Twotimesacharm]

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@JVille wrote:

My opinion, you need two years of clean Mortage pmt history with NO other late pays in any CC or obligation. That's 2 yrs moving forward. That's just how I see it but not everyone would agree. Good Luck to you!

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We spoke to the bank and because we have an FHA secured loan, we were able to restructure with a lower interest rate and put all the deferred payments at the back loan with no credit check at all (all due to the CARES Act) It was perfect. Hopefully my dispute goes in my favor and my score jumps again (Experian went up to 665 when my NFCU accounts it andbmy utilization across all cards went to 3%). Hoping to get all scores to 670 or above (officially "good")

[SandyNC]

Thanks for the reply.  
I have 2 years on-time mortgage payments on PPH. PPH started reporting 3/2019.   With the Ocwen/PPH merger my Ocwen ended with one year on-time after 14 months late.  

I have write-offs from early 2017.  They are now 4 years old.  All CCs have been on-time since then.  Those open accounts are clean.  I believe it is the derogs  from 2017 that is keeping my score down and that it is thin..

Congrats on your progress.  Appreciate the example

[Twotimesacharm]

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@SandyNC wrote:

Thanks for the reply.  
I have 2 years on-time mortgage payments on PPH. PPH started reporting 3/2019.   With the Ocwen/PPH merger my Ocwen ended with one year on-time after 14 months late.  

I have write-offs from early 2017.  They are now 4 years old.  All CCs have been on-time since then.  Those open accounts are clean.  I believe it is the derogs  from 2017 that is keeping my score down and that it is thin..

Congrats on your progress.  Appreciate the example

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I am no expert by far, but what I have read is that you can take out a self-funded loan to give your profile diversity and thicken it up. There are ones that don't require a credit check so that won't ding and having an extra account might help. Others can chime in and give you more indepth opinions and suggestions 😉

Good luck!