My wife and I are in a situation where we need to move and be in a new place by mid August. The current home we are in the owner has decided to sell. We need some suggestions ASAP.
A little background of myself and my wife:
My credit score is 585 and will hopefully go up a bit very soon due to paying off a collection last week. I have a Ch. 7 BK from 2012 and unfortunately a chargeoff auto loan from 2016. I have 1 small credit card that I pay in full each month and it currently has a $0 balance.
My wife has a 670 credit score and 2 credit cards with a $5000 limit each. Unfortunately they both have a balance of around $4800 due to a family emergency where we needed funds. No other debt besides basic car payments, etc.
Our joint income is around $60,000
I am eligible for a VA Loan but it looks by reading that 90% of lenders require a 620.
How will the inquiries affect our credit when applying for a Mortgage? If we dont get approved, does that score hit from the application hurt to where rental companies will see it? Any info would help and any advice...
Hello my fellow Vet,
Sounds like you have an opportunity to purchase the home you have been renting. That's great! At least you know the house and all it's little quirks. First, please know the VA has no minimum credit score requirement. It's up to each individual lender to decide what threshold of risk they can choose to accept. For example, my company goes down to 550 on a FHA and VA and down to 500 case by case. So don't let having a 585 alone prevent you from applying. As far as inquiries goes, don't be too concerned about that. If you decide to apply for a mortgage, I strongly caution you about paying any collection off prior to applying for a mortgage, as it will most likely will drop your scores. Wait to run that by your Loan Officer. As far as charge offs, the VA does not require they be paid off, unless they are government related. I hope this helps you!
I believe OP said they are needing to move, not buy the house they're in (as it stated they need to move and find a place). I am certainly not too knowledgeable about VA loans, however, generally speaking most mortgage lenders will not like to see a BK several years ago and then followed by a recent Charge Off. That would kind of say "They didn't learn their lesson the first time". What I have read from here it seems VA loans might be more forgiving on this type of thing. As @homeloanexpert mentioned, I've seen many successfull mortgage loans for people who have scores below 600. I do agree the best approach is sit down with a LO and go over your situation. As already mentioned the inquiry itself won't be a big deal if you decide to fully apply right now