Will I qualify for an FHA loan?

[Anonymous]

I unfortunately got a little over zealous and made my own thread without checking the stickies - sorry about that.  Below are the contents of my thread, which pertain to this topic.   EDIT:  I moved your thread away from the stickies so you can get your answers - StartingOver10

Hey everyone,

About 5 years ago my credit took a complete nose dive.  Things got bad, and there went my 800 score, down to in the 400's for a while.  Since then I've worked incredibly hard to build it back up.  Kept my auto loan history mostly good through out this period, though there were a few late payments ways back.  At this point theres over 3 years of good auto loan payments, as well as paying off the car in full and opening a new loan (I lease).  All my outstanding old collection debt is zero'ed out.  My soon to be fiance has me as an autorized user on 3 of her credit cards, all of which report to my credit as well to help improve my score so we can get a house.  

Were looking to do an FHA loan on about a 240-250k house, max FHA in my area is $271,000.  My current scores are Equifax - 602, T/U - 600, and Experian -639 which is a longggggg way from where I was.  I know it's not close to perfect but from what I've read FHA loans are a little more lienient with getting approved.  I have a decent income which I hope will help be the deciding factor.

My girlfiend will be going on the loan as well, her credit is above 700.  I'm just worried that my past issues will kill the entire deal.

Thanks in advance,

Rocco

[krielly]

What is the utilization like on those accounts you are listed as an authorized user on? There may be some room for improvement if it isn't already low and you are able to pay it down......

K

[Anonymous]

Almost nothing.  We both use one of the cards, usually charge about $1,000 per month on it and pay it off in full each month.  The only other installment debt I have is my leased vehicle with a $650 montly payment.

[StartingOver10]

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@Anonymous wrote:

Almost nothing.  We both use one of the cards, usually charge about $1,000 per month on it and pay it off in full each month.  The only other installment debt I have is my leased vehicle with a $650 montly payment.

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Utilization is calculated using the balance shown as of the reporting date. Do you pay the $1000 befoe the statement cuts or after? In other words is that balance reporting to the CRA's and what is the utilization when it reports?  If you have $1000 reporting out of $2k on that card, it keeps your score down. If the card cr limit is $10k or higher, then you don't have to worry about utilization as long as you have 3 cc's (revolving accounts) and the balance only reports on one and not all three and the balance that reports is between 1%-9%.. 

[Anonymous]

Sometimes before due date, and sometimes when its due.  I'm aware of the utilization aspect.  It's a 2k card, even if it does report $1000 used of $2000, we have 2 other cards with a 3 and 4k limit that literally never get touched, so overall utilization remains very low.