cancel
Showing results for 
Search instead for 
Did you mean: 

Goal is home purchase, need strategy sanity check.

Estimate your FICO® Score range for free

FICO® Score Estimator

Auto Loans for ANY Credit Situation. Immediate Response.
Advertiser disclosure
Valued Member

Goal is home purchase, need strategy sanity check.

Original plan was to purchase fall of next year. Realized today after reading another thread that I have another obticle to overcome. My scores are in the upper 600s. I was hoping to be in the low to mid 700s by then. After reading some threads I have to change my plans. I have 3 COs on my reports that are currently five+ years old. I read today that I probably wont be approved for a mortgage with them on my report regardless of my score. The newest of the three's DoFD was 01/14. From what I understand, best case scenario they should drop off 01/21.  Now my plan to purchase is spring of 21. 

 

I have two CC accounts that I opened this year. I maintain 9%, and PIF after the statement cuts. I just paid off my installment loan (car) last month and am expecting my scores to take a hit. My original plan was house first, then trade the car. Now I'm thinking car first. If I buy now and finance for 36 months, I will be half way through the loan when it's time to buy a house. 

 

Thanks as always for any insight as to the best way to go forward. 

Message 1 of 7
6 REPLIES 6
Community Leader
Super Contributor

Re: Goal is home purchase, need strategy sanity check.


@User1072839 wrote:

Original plan was to purchase fall of next year. Realized today after reading another thread that I have another obticle to overcome. My scores are in the upper 600s. I was hoping to be in the low to mid 700s by then. After reading some threads I have to change my plans. I have 3 COs on my reports that are currently five+ years old. I read today that I probably wont be approved for a mortgage with them on my report regardless of my score. The newest of the three's DoFD was 01/14. From what I understand, best case scenario they should drop off 01/21.  Now my plan to purchase is spring of 21. 

 

I have two CC accounts that I opened this year. I maintain 9%, and PIF after the statement cuts. I just paid off my installment loan (car) last month and am expecting my scores to take a hit. My original plan was house first, then trade the car. Now I'm thinking car first. If I buy now and finance for 36 months, I will be half way through the loan when it's time to buy a house. 

 

Thanks as always for any insight as to the best way to go forward. 


 

Are your COs unpaid? 

EX 754 EQ 773 TU 752
Message 2 of 7
Valued Member

Re: Goal is home purchase, need strategy sanity check.


@Remedios wrote:

@User1072839 wrote:

Original plan was to purchase fall of next year. Realized today after reading another thread that I have another obticle to overcome. My scores are in the upper 600s. I was hoping to be in the low to mid 700s by then. After reading some threads I have to change my plans. I have 3 COs on my reports that are currently five+ years old. I read today that I probably wont be approved for a mortgage with them on my report regardless of my score. The newest of the three's DoFD was 01/14. From what I understand, best case scenario they should drop off 01/21.  Now my plan to purchase is spring of 21. 

 

I have two CC accounts that I opened this year. I maintain 9%, and PIF after the statement cuts. I just paid off my installment loan (car) last month and am expecting my scores to take a hit. My original plan was house first, then trade the car. Now I'm thinking car first. If I buy now and finance for 36 months, I will be half way through the loan when it's time to buy a house. 

 

Thanks as always for any insight as to the best way to go forward. 


 

Are your COs unpaid? 


Yes, sorry I meant to include that. I considered trying to settle them but since I am closer to them falling off, and if I wait another 6 or so months and they should fall off, I decided against for now. 

Message 3 of 7
Community Leader
Super Contributor

Re: Goal is home purchase, need strategy sanity check.


@User1072839 wrote:

@Remedios wrote:

@User1072839 wrote:

Original plan was to purchase fall of next year. Realized today after reading another thread that I have another obticle to overcome. My scores are in the upper 600s. I was hoping to be in the low to mid 700s by then. After reading some threads I have to change my plans. I have 3 COs on my reports that are currently five+ years old. I read today that I probably wont be approved for a mortgage with them on my report regardless of my score. The newest of the three's DoFD was 01/14. From what I understand, best case scenario they should drop off 01/21.  Now my plan to purchase is spring of 21. 

 

I have two CC accounts that I opened this year. I maintain 9%, and PIF after the statement cuts. I just paid off my installment loan (car) last month and am expecting my scores to take a hit. My original plan was house first, then trade the car. Now I'm thinking car first. If I buy now and finance for 36 months, I will be half way through the loan when it's time to buy a house. 

 

Thanks as always for any insight as to the best way to go forward. 


 

Are your COs unpaid? 


Yes, sorry I meant to include that. 


What's the amount on charge offs? Have you done any prequals for auto loans and if so, what were the APRs quoted to you? 

 

EX 754 EQ 773 TU 752
Message 4 of 7
Valued Member

Re: Goal is home purchase, need strategy sanity check.


@Remedios wrote:

@User1072839 wrote:

@Remedios wrote:

@User1072839 wrote:

Original plan was to purchase fall of next year. Realized today after reading another thread that I have another obticle to overcome. My scores are in the upper 600s. I was hoping to be in the low to mid 700s by then. After reading some threads I have to change my plans. I have 3 COs on my reports that are currently five+ years old. I read today that I probably wont be approved for a mortgage with them on my report regardless of my score. The newest of the three's DoFD was 01/14. From what I understand, best case scenario they should drop off 01/21.  Now my plan to purchase is spring of 21. 

 

I have two CC accounts that I opened this year. I maintain 9%, and PIF after the statement cuts. I just paid off my installment loan (car) last month and am expecting my scores to take a hit. My original plan was house first, then trade the car. Now I'm thinking car first. If I buy now and finance for 36 months, I will be half way through the loan when it's time to buy a house. 

 

Thanks as always for any insight as to the best way to go forward. 


 

Are your COs unpaid? 


Yes, sorry I meant to include that. 


What's the amount on charge offs? Have you done any prequals for auto loans and if so, what were the APRs quoted to you? 

 


I have two at around $1500 and one at $300. I haven't shopped for loans yet so I don't know where my APR will be. I wanted to make sure that I'm moving in the right direction before looking into car before mortgage. Thanks for your continued advice by the way. 

Message 5 of 7
Community Leader
Super Contributor

Re: Goal is home purchase, need strategy sanity check.

So, here is the thing. Depending on your income, a car with high APR can significantly increase your DTI because payments will be higher,  which in turn will come in play during the mortgage application. 

With scores around 600, you might get lucky or you may end up with something like 15% APR. That's brutal on large amount. 

Usually the best rates come from CUs, but CUs do not want to see unpaid COs. No lender does, really. 

I would not attempt get a loan while those COs  on your report  remain unpaid. 

 

If the car is not an absolute must now, and you're not willing to pay/settle your COs, I'd wait. 

 

EX 754 EQ 773 TU 752
Message 6 of 7
Valued Member

Re: Goal is home purchase, need strategy sanity check.


@Remedios wrote:

So, here is the thing. Depending on your income, a car with high APR can significantly increase your DTI because payments will be higher,  which in turn will come in play during the mortgage application. 

With scores around 600, you might get lucky or you may end up with something like 15% APR. That's brutal on large amount. 

Usually the best rates come from CUs, but CUs do not want to see unpaid COs. No lender does, really. 

I would not attempt get a loan while those COs  on your report  remain unpaid. 

 

If the car is not an absolute must now, and you're not willing to pay/settle your COs, I'd wait. 

 


No, car is not a must, and I would be willing to settle them, but that would take away from saving a down payment for the mortgage. If I settle them they still hurt my score until 1/21, althogh I would probably qualify for a mortgage if they are paid. If I don't settle I have to wait another 6 months or so to start shopping. Not that I don't want to pay a debt, but it made more sense to me to wait and let them fall off. Also, I figured being half way though another installment loan would help. That's the way I was looking at it. I appreciate the advice. 

Message 7 of 7
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.