Will Major Changes in AAoA and AoOA Hurt Mortgage Chances?

[Anonymous]

Getting a master plan together for a future mortgage, but have some questions that I am hoping someone can help with!

Right now, my AAoA is 5y2mo. My AoOA is 8y11mo.
I have some major lates (13-16 over 90-120) on my oldest 12 accounts. 4 will age off 10/2020, the other 8 will age off 6/2021. When these accounts fall off, will it help or hurt my scores (considering it will reset my oldest account to about 2.5 years and my average age of accounts to way below that).

I know that having the lates removed from my reports will be a good thing, but I will still have my ch 7 bk until 2028.

I guess my main questions are:

Would I be better off applying for a mortgage BEFORE those age off in June 2021?
Or waiting a few months AFTER they age off to hopefully raise my scores back up?

Right now, middle mortgage score is 650.

[Revelate]

I think there's a misconception here: just because your lates are excluded doesn't mean your accounts fall off.

Literally the specific payment history just goes away, but the tradeline will still be there with an open date and closed date and a few other details but that's not a negative tradeline and really with the way the algorithm works anything not negative is a positve.

You won't get a huge boost because you still have the BK but they do still factor... if you have no other lates you probably shift into a higher scorecard, plusses and minuses to that TBH and the BK is still a score killer regardless.

I would do what makes sense financially as long as you can qualify for the mortgage you want but odds are your scores probably increase some if you just hold pat till those lates expire... but 6/21 is literally 2 years from now, and that's a while.  I think the key date that you're going to need to contend with is the date of that BK which I think is 6/18 from your post?  There's some loan product restrictions around BK's which I'm sure some of the people on this board can tell you, but that's your date to plan around imo.

Actually funny, here's a post I just read on FHA, think conventional is longer:

https://ficoforums.myfico.com/t5/Mortgage-Loans/Getting-a-mortgage-after-Ch7/m-p/5655076/highlight/t...

So you're looking at like 7/2020 anyway for a first possibly mortgage app I think.

[Anonymous]

Thanks for your reply!
According to TU, the dates that I provided are for the accounts to be removed from my CR (not just the lates), so the entire tradelines will be removed. The lates will be over 7.5 years and the accounts will be over 10 years and they are all already closed.

I filed Chapter 7 in June 2018, and was discharged in October 2018. I know that theoretically, I can't get a FHA mtg until 2 years from DC date- which would be October 2020.

I was just wondering if I would be better off waiting until after June 2021 to even apply or apply after October 2020 but BEFORE June 2021 if my scores were going to be hugely affected by losing my oldest accounts.

I understand that these dates may seem like a ways off from now, but I want to be able to plan a large move because the mortgage will be for a house in another state (and a job transfer).

Hope this helps explain things better!

[Revelate]

I'm still a little confused   Lates are excluded at the 7 year mark from the date they occurred.

OC Tradelines are excluded roughly 10 years from the date they are closed; basically you closed the account but didn't bring the accounts current till 3 years later?  I'm not sure that the time "this account falls off your report" as seen on Transunion is exactly accurate for the OC tradeline exclusion but regardless I think it's a bit of an academic point.

Anyway to your specific question, I would check scores once you get to that 2 year mark from DC, if you're ready financially and you qualify don't hesitate.  Odds are you won't get that many points from the rest of the lates being excluded, possibly might even lose some and if your tradelines really are going bye bye and if you're going FHA (where you don't get a better deal for a higher FICO) then go.

If you aren't ready financially at that point, then wait it out.  My recommendation anyway.

[Anonymous]

Thanks for your replies and your recommendations!

The lates were about 2 years before the accounts were closed if I remember correctly. I guess that I will just wait and see what happens to the first set that are supposed to fall off in October 2020. So far, the dates that TU had for accounts falling off have been correct (had a positive account fall off in May)

Thanks for your help!