Score cut-off for FHA Automated UW?

[Xev0luti0nXx]

This is a question for Shane, or any other Mortgage specialists.

Is there a certain score when applying for an FHA loan that deems it necessary for a manual underwriting?

If your score is high enough would you be able to get approved without touching on old collections, late payments or other derogs from the years past?

Thanks!

[ShanetheMortgageMan]

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Is there a certain score when applying for an FHA loan that deems it necessary for a manual underwriting?

If your score is high enough would you be able to get approved without touching on old collections, late payments or other derogs from the years past?

Thanks!

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If you get an automated approval, then there is no need to have a manual underwrite done on your loan.  There is no specific score that one must have in order to get an automated approval though.  Since automated underwriting takes a comprehensive analysis of one's situation, someone with lower scores, but a low DTI, nice sized down payment, and good reserves after down payment could get approved via automated underwriting.  An automated underwriting approval makes the rest of the approval process much easier since items such as credit explanations, rent history verification, etc. can be waived.

[Xev0luti0nXx]

Thank you for the explanation. When I apply for an FHA mortgage my Credit score will be 620, DTI at about 5% and am planning on doing the 3% Down payment. In your personal opinion what do you think the chances of me being approved through the automated process are?

It would be much easier to just get approved without having to write out explanations for anything.

Thanks!

[Xev0luti0nXx]

bump!

[ShanetheMortgageMan]

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Xev0luti0nXx wrote:
Thank you for the explanation. When I apply for an FHA mortgage my Credit score will be 620, DTI at about 5% and am planning on doing the 3% Down payment. In your personal opinion what do you think the chances of me being approved through the automated process are?

It would be much easier to just get approved without having to write out explanations for anything.

Thanks!

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It would depend on what negatives are on your credit... so let us know the detail on that.  Also, the DTI before the mortgage payment doesn't mean much, it's what it would be after the mortgage payment is figured in.  We'd need to know your income, payments on your debts (which since we know is 5% we can figure it out if we know your income), and if you have any reserves/assets after the 3% down payment.  If everything else checks out, a 620 score is likely to qualify for an automated approval.

[Xev0luti0nXx]

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@ShanetheMortgageMan wrote:

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@Xev0luti0nXx wrote:
Thank you for the explanation. When I apply for an FHA mortgage my Credit score will be 620, DTI at about 5% and am planning on doing the 3% Down payment. In your personal opinion what do you think the chances of me being approved through the automated process are?

It would be much easier to just get approved without having to write out explanations for anything.

Thanks!

---

It would depend on what negatives are on your credit... so let us know the detail on that. Also, the DTI before the mortgage payment doesn't mean much, it's what it would be after the mortgage payment is figured in. We'd need to know your income, payments on your debts (which since we know is 5% we can figure it out if we know your income), and if you have any reserves/assets after the 3% down payment. If everything else checks out, a 620 score is likely to qualify for an automated approval.

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Shane, here is my break down.

Credit Negatives:

Macy's CO - March '07 $0 balance
Orchard Bank CO - March '07 $0 balance

2 medical collections from '06 - $0 balance
1 Semco (gas utilities collection) - Moved from my apartment and requested it to be shut off when I paid my last bill, they never did and it went into collections.

My debts are very minimal as of right now, I have 1,228 in revolving that I am going to pay off in the next month. I also have about $900 in installment loans that I am going to pay for the durations just to help establish my good payment history.

I am getting married in December of this year and we are frantically saving money for the wedding and for the house. After we pay for the wedding and after the down payment we should still have around 10-15k in reserves. Combined we make about 65k a year. She has absolutely ZERO debt.

We would be looking to get a loan for between 90,000 and 120,000.

Please let me know what you think! Thanks!

[ShanetheMortgageMan]

I think you should be fine to get an automated underwriting approval, the credit items are over a year old, and your debt ratio & reserves are pretty solid.

[Xev0luti0nXx]

Thanks Shane!

Just wanted to let you know I've read a ton of your posts and appreciate that the forum has someone as knowledgeable as you around!

[ShanetheMortgageMan]

Welcome!!