Trying to get a home mortgage (First post)

[kylejb2663]

Hey guys,

I am new to this forum, I joined in hopes of getting some great advice.

I read the mortgage post so I will post all of our info and hopefully you guys can help! My soon to be wife and I are looking at purchasing our first home after our wedding in February of 2012.  We have close to $3,500 in savings and are banking on the rest of the 3.5% from the wedding.  However, my credit is not the best and her credit is good but she does not have much (A few 30 day lights maybe 2 in the past 2 years from when she was in school).  I suffered from a reposession in 2007 but have paid it in full sense then.

Fiance's Credit Scores: 595 (Equi.) 617 (Exp) 610 (TU)

My credit Scores: 597 (Equi.) 607 (Exp.) 616 (TU)

Fiance's Income: $48,000 (Another 8,000 added on due to shift differentials, etc) Total Income: $56,000

My Income: $51,200

Our Debt's listed together on a monthly basis:

Personal Loan: $432.00

Car Payment: $374.00

Car Payment: $265.00

Student Loans: $158.00

Student Loans: $50.00

Credit Card 1 (First Premiere): $0

Credit Card 2 (First Premiere): $0

Credit Card 3 (Capital One): $0    

Credit Card 4 (Bank of America): $0

Credit Card 5 (SEFCU SECURED): $89 monthly (Balance of 2950 with 3000 credit limit)

Jobs:

Job #1 almost 1 year at my current position that i was promoted too (Different company), 3 years at my last position. (hourly positions)

Job #2 almost 9 months are current position after graduating school, a few months off while finishing school, 2 years of work history prior to that with the same company though. (Hourly positions)

House Location:

We are looking for a single family home in Upstate NY with some land not much and hopefully a budget of 225-250 with 3.5% down.

So what do you guys think?  We did contact a mortgage company and they told us we were not qualified at the time (2-3 months ago) but he gave us some good information which was to pay off our credit cards.  They were mostly all maxed out.  As you can tell we did pay off our cards except for one.  We also did request a credit line increase on two of the cards and we did get it without running a credit check.  Each of the two cards when up 100 dollars each.

[JusdoNit]

I too am looking to get a mortgage within the next 5-7mos. While I am not an expert I can tell you what I have learned from the grant and down payment assistance workshops.

1. You need at least a 640 for an FHA loan that requires 3.5% down.

2. Never heard of a lender telling you to pay all your cards down to zero before looking at your credit. They want to see the hard earnest monies and a pattern of savings for at least 6mos.  Paying your utilization down to about 1% is suggested, but only after a preapproval if necessary.  They want to see the actual cash and see you making good strong payments. Looked at ur installs 7 maybe that is why he said pay the cards off.

3. Accounts that will be paid off within 10 months do not count against you. Total of all credit cards/ car notes and so forth should be as close to $400 outgoing dollars a month.

4. No credit inquiries within 6mos. of applying for the mortgage loan. (learned this one today)

5. All additional monies that you use to pay balances down above the minimum payment can be counted towards the mortagage payment.

6. No collections. bk's, etc within the last 2 years.

Hope this helps. If i remember anything else I will share.

**Just my 2 cents... I've been told; Big expensive weddings are beautiful, but there is no greater feeling than coming home to your own.  I'm sure it will all turn out beautiful for you and your family.

[Booner72]

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@JusdoNit wrote:

I too am looking to get a mortgage within the next 5-7mos. While I am not an expert I can tell you what I have learned from the grant and down payment assistance workshops.

1. You need at least a 640 for an FHA loan that requires 3.5% down.

2. Never heard of a lender telling you to pay all your cards down to zero before looking at your credit. They want to see the hard earnest monies and a pattern of savings for at least 6mos.  Paying your utilization down to about 1% is suggested, but only after a preapproval if necessary.  They want to see the actual cash and see you making good strong payments. Looked at ur installs 7 maybe that is why he said pay the cards off.

3. Accounts that will be paid off within 10 months do not count against you. Total of all credit cards/ car notes and so forth should be as close to $400 outgoing dollars a month.

4. No credit inquiries within 6mos. of applying for the mortgage loan. (learned this one today)

5. All additional monies that you use to pay balances down above the minimum payment can be counted towards the mortagage payment.

6. No collections. bk's, etc within the last 2 years.

Hope this helps. If i remember anything else I will share.

**Just my 2 cents... I've been told; Big expensive weddings are beautiful, but there is no greater feeling than coming home to your own.  I'm sure it will all turn out beautiful for you and your family.

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I would like to respectfully disagree with some of this info.  You can get an FHA lower than 640, it will just probably cost you in higher interest.  I do believe you need at least 620 and it doesn't look like you guys are quite there yet.  Almost, though.  Remember, they take the lowest  middle score of the two of you if you are applying together.  I went through "Academy Mortgage" and was assured if I didn't make 640, that 620 would do it.  (1% higher interest and higher closing costs).

You need to have 12 months (not 2 years) of "clean credit" - no lates, no new collections, etc.

You CAN have inquiries or new credit in the previous six months, it just needs to be explained.  So don't do it anymore to be safe.

My advice is to not apply for any credit, let just ONE tiny account report a VERY SMALL balance (1-9% of it's limit), and let your scores come up a little bit.

Good Luck!

EDITED TO ADD:  I'd advise you both to buy your EQ scorepower report here.  It will tell you what is helping and hurting your scores, both of you look like Equifax is telling you that there is work to be done.

Again, Good Luck