FHA Mortgage Lenders?

I am ready to finally apply for a mortgage loan and went into my credit union this morning to do so but left feeling very frustrated. I have ONE derogatory item, a foreclosure. I know, the worst derog when applying for a mortgage. Foreclosure started Sept. 09, Certificate/deed transferred Feb 2010. So I think I am within FHA quidelines, timewise, which I believe is 3 years w/o extinuating circumstances. The branch mngr was very unsure of anything and opened an instant msge chat window with loan officer in their Orlando office. I am assuming their quidelines encompass their overlays, because their loan quidelines mirrored those of conventional loans. I pressed for more specifics on their quidelines and the loan officer came back with they don't do FHA loans and havent done them for approx 8 months and she doesnt know why they dont remove that option/product from their list. I will list my specifics and hoepfully someone can share their experiences/recommend someone in my area?I have next Monday off and want to apply so I can start looking at properties without wasting everyones time. Credit limits available 37500, credit owed ( 2 cards, $8, 200 )Income 35k annuallyDebts; 2 credit cards only, minimum payments roughly $125, I always pay moreSavings, verifiable funds, 16kRetirement, 10k, half of which I can borrow but won't.FICO Mortgage scores per this site are all above 710.10% down plus closing costs, mortgage no more than 70K.No lates, nothing derogatory except foreclosure, aaoa 16 yrs Thanks in advance for any advice, recommendations, etc.

I just sent you a PM of two fantastic loan officers that do FHA loans and do them well

Similar Messages

FHA Mortgage Question New York

FHA Mortgage Question I'm a first time home buyer my credit scores are Trans. 683, Exper. 666 and Equ. 653.I had a bankruptcy and it will be four years this September. I have had zero late payments in the last 12 months. My last late payment was January 2014. The house price I want to purchase is $145,000 I have put a deposit of $17,700 and I still have $10,000 in the bank. My over all monthly payments are $932 a month and my annual salary is $75,000. Can anyone help me getting approved for an FHA loan or do I not qualify....

ATT gave me a 917 number, hope it helps.

Fico score question and mortgage lenders

Sorry so long...I've been slowly but surely building my credit up. I subscribe to USAA's credit monitoring service which goes thru Experian and allows all 3 credit scores every 30 days. Last month, my scores were 680+ on 2 (Equifax and Transunion) and 620 on Experian because of a recent collection. My loan officer pulled my credit and agreed. He said I was good as long as 2 of the bureaus were 680 or above. I disputed the recent collection and it was removed. I pulled my credit score for Experian again and it went to 680. Last night my loan officier sent me the inital loan documents and I saw that my interest rate had increased by .25% and only my Equifax was over 680. My Transunion had dropped to 673 and my Experian still showed 620. I asked him about it today and he said that he pulled my scores 2 days ago and these were the new scores. Neither I nor him could find a reason why my scores went down. I get alerts whenever anything hits my credit and I haven't had any inquires or new lines of credit since I started the loan process. My questions are: 1. Does the mortage company use a different algorithm then credit monitoring services, ie, Experian2. Why would my score change but neither one of us see a difference in my credit report explaining why.

Comments inline. gettinto800 wrote:
Others have more expertise but here's what I've learned as we are going through the mortgage process. Your LO should give you a copy of the credit report he pulled. They pull mortgage scores. On the credit report it will show you what they pulled. Most LO use a credit pulling firm to pull. It will say like FICO-II TU CLASSIC 04 BEACON 5 etc. A) Be careful with your LO doing too many hard pulls. This alone can hurt your credit. When he pulled the credit report and the numbers/your score was good -- why wouldn't he just use that? I don't understand that. A credit pull by a lender is good for 90 days. To pull again 2 days later doesn't make sense. Even if it was just a "soft pull" on there part or an "update" pull to your score. Others can comment on this but to me it seems strange to pull 2 days later. Unless it was a "rapid rescore," maybe? Which is hit and miss from what I've read. Not sure why they did a double-tap, but doesn't matter: grace period of 30 days if the mortgage inquiries are properly coded (all mine were from 3 different lenders) and there's a 14-45 day rollup period where it will only count as a single scorable inquiry. B) If your score changes and you don't know why -- it could be the inquiry it could be a mystery! This is what is so hard, I'm finding, in doing the mortgage process. They use different scores and it's very hard to get an accurate picture of what's going on. I've had no luck with MyFico alerts. It will claim more score jumps 7 points because of an address change. Really? (It was a typo that somehow got on there, I have no idea, I never changed my address). You would have to pull your reports (which is a soft pull and doesn't impact you) and analyze it and compare it to the previous one to figure it out and you still might not know. You're right on both counts that take the alerts with a grain of salt, the scores are different; however, FICO isn't capricious, if you have access to the base data it can be figured out virtually every time. Something changed to account for a 7 point difference, might be small and hard to spot (age of tradelines or what not) or something obvious like a balance change. That said, to me, 673 vs 680 doesn't seem like that much. I don't know if that should equal a .25% rate change. Maybe, I don't know enough about that. Maybe you're in a different tier then. Not sure. That said, if you look at your UTI and stuff hopefully you could get it back up there. 680 is a Tier for virtually every mortgage lender on the planet. Certainly is for conventional and I think FHA loans too though I don't know those as well. To us as consumers, a 7 point swing is whatever, except when we're in the mortgage process and playing on a tier boundary without a gold-plated score to begin with... then it matters a great deal. Big enough that if it were me I'd be scrutenizing my reports, and if it were fixable I'd do so and have them pull again.

Recommendation for FHA mortgage lender in Michigan?

Hey folks! I'm gearing up for my 2016 home ownership quest and am in search of a good mortgage lender/broker in Michigan. I am a first time home buyer who is confused as heck and knows next to nothing about the process except that I need at least a 620 middle score to qualify. I will only have about $10,000 for a down payment and such which is why I am looking to qualify for an FHA loan. Does anyone have a recommedation for someone in my state that is good with people going through the process for the first time? Thanks in advance!

It wont be BofA that removes it at 7 years, it will be the credit rteporting agencies. You can ask for an early exclusion (I had good success with TU and EX and didn't have anything on EQ to try on.) Call and ask for EARLY EXCLUSION. TU may take a few tries before you get someone that knows what you are talking about. EX was a piece of cake. You will need a report number to get thru on EX phone system (the last copy of your free report from annual credit report will have a 10 digit number at the top). If the others are old you can try the same thing, otherwise you may have to contact the creditor and get them to email you letters stating it should be updated and get those in the hands of the

How to Remove items without opening new dispute for FHA Mortgage approval

Hello, these forums are very helpful. How do I remove items from the bureaus without filing a dispute? For example, I have several old accounts that are expired now. On 2 of them, I tried calling the creditors directly and they were so old that they said they had no information. I can't file a "dispute" with the bureaus because as you know, you can't close on a mortgage with an open dispute and I don't have time to wait 30 days. I can't quite go to the creditor when they're like "it's so old we have no information." The other issue I have is there are some blatant errors. For example, student loans errors. I have letters from my student loan company saying they've corrected with the credit bureaus -- but then they show up. What should I do? Again, I can't open disputes because I can't have an open dispute and close on a loan. LVNV put something on my credit report for a dental bill I paid in cash. It was years ago. I don't know how to go about proving I paid it. Last but not least I have a charge-off from Bank of America that's reaching the 7 year mark in 2 months. Is B o A good about removing after it hits that mark? Should I even try a goodwill ask of them to remove it early or at least update it to a 0 balance? (They didn't sell it so it still shows a balance) Or anything? I'd be afraid of offering any type of payment for fear they'd open the loan and re-age it since it's going to fall off in a month. All help appreciated

It wont be BofA that removes it at 7 years, it will be the credit rteporting agencies. You can ask for an early exclusion (I had good success with TU and EX and didn't have anything on EQ to try on.) Call and ask for EARLY EXCLUSION. TU may take a few tries before you get someone that knows what you are talking about. EX was a piece of cake. You will need a report number to get thru on EX phone system (the last copy of your free report from annual credit report will have a 10 digit number at the top). If the others are old you can try the same thing, otherwise you may have to contact the creditor and get them to email you letters stating it should be updated and get those in the hands of the

My Mortgage Journal (formerly: Would I qualify for an FHA Mortgage in ME?)

CREDIT Scores:TransUnion: 624Equifax: 621 Negatives:Collections:$150 unpaid utility. Was not aware of this - never contacted by utility or collection agency. Found out about it myself after reviewing my report. Contacted collection agency with a PFD letter. Can pay off immediately. Dated: 3/6/2013Charge-Offs (Due to a divorce. Wife abandoned me, draining joint account down to $1.17 and left me to do the best I could with what I had. I paid rent and car above all-else. Can evidence w/ copy of Divorce Decree):$0.00 American Express credit card. Date closed: 3/21/2012. Status on CR: Closed - Paid-off after account closure$2,928 Bank of America credit card. Date closed: 7/24/2012 Status on CR: Closed$0.00 Macy's store credit card. Date closed: 8/17/2012 Status on CR: Closed - Paid-off after account closure$982 Kohls store credit card. Date closed: 9/12/2012 Status on CR: ClosedOpen Accounts:Credit Cards:$100 ($500 limit). Capital One credit card. Date opened: 12/19/2013. Status on CR: Open - Current/Pays as AgreedVehicle Loan:$0.00 Date opened: 11/23/2009. Date closed: 8/17/2013. Status on CR: Closed - Current/No Missed Payments$14,041 Date opened: 7/30/2013. Status on CR: Open - Current/No Missed PaymentsClosed Accounts:Student Loans:$0.00 Date closed: 2/22/2010. Status on CR: Closed - Current/No Missed PaymentsOther (Public Records, Judgements, Tax Liens, Child Support, Bankruptcy):NoneHard-Pulls:6 (5 of which will fall off by 8/2015) INCOME Full-time Employment Salary:$67,000 annuallyBonus:3-6% annuallyExplanation:Full-time salary employment as a Risk & Insurance Manager. I started here 12/2014, but have been doing substantially similar work all along. Prior positions: Contracts Manager (2 years), Project Analyst (2 years), Insurance Underwriter (5 years). MONTHLY DEBT PAYMENTS $377/month vehicle payment$25/month credit card payment (can pay off immediately, but was intentionally carrying a balance) ASSETS/RESERVES ~$10,000 LOCATION Portland, Maine and surrounding PROPERTY Single-family home - as turn-key as can be. VALUE $150-200k w/ 3.5% down. Family member is willing to contribute towards downpayment and provide a gift letter. OCCUPANCY Primary Residence TRANSACTION TYPE First-time Purchase

Updates: The utility collection has been removed from Equifax and Experian; TransUnion is dragging their feet...maybe next week.CapitalOne is reporting my updated balance, but not my new limit, so my utilization is artificially skewed...again, maybe next week.My CreditKarma scores took a dump this week - not sure why as the only changes were improvements (i.e. removed collection). My MyFICO scores improved though (further evidence that CK is essentially worthless). New scores are: EQ 04: 627 (+11)TU 04: 595 (+/- 0)EX 98: 604 (+9) I anticipate greater increases once CapitalOne reports my increased limit. That should push my utilization to under the 30% sweet-spot. Still waiting on a response from the bank regarding the erroneous 30-day-late they reported in July 2013. I faxed them copies of my payment confirmations from that month, as well as the month prior. Not sure a removal will provide a significant boost at this point though; it's almost 2 years old. My Bank of America charge-off is still there as well, and reporting the full balance. I don't anticipate a score change once it's updated, but the $0 balance will certainly help to smooth that rough edge. EDIT: Backstory on the 30-day-late, as I realize I hadn't shared that previously. My now closed earlier auto loan reflects "No Missed Payments" on TransUnion, however it shows a single 30-day-late payment in July of 2013 on both Equifax and Experian - two weeks before I paid the account off in-full in August 2013. I have my payment confirmations from June and July of 2013. June's payment was 2 days late due to website maintenance (I have their email stating the dates of maintanance, and faxed that to them as well). I could not have paid it earlier as my payday and due date coincided that month, so instead I made my payment on the next available date. Still, I was never 31+ days late on that account, no matter how you do the math.

Do I have a chance at FHA automatic underwriting approval?

Here's my situation: Long but please read and help :-) I recently sold my home in GA and relocated back to CA. I had my current mortgage for only 18 months before relocation and have had zero missed payments. When I called my current morgage broker and let them know of my relocation I was instantly given preapproval upon supplying them with my W2's, income/bonus info and so on. We found a home in CA and had been in escrow for about a month (45 day escrow). We had everything set up to actually close a few days early when all of a sudden I was told that they couldn't do the loan. He never mentioned any problems with my credit score and I hadn't been looking into myself. Basically it was a mess. I've had recent lates on two installment accounts (both auto) with the most recent showing at 3/2015. I also had a credit card we had cancelled last year but didn't actually cancel hit me with a 30, 60 & 90 day late (12/14, 1/15, 2/15) and another credit card hit me with a 30 day late 1/2015. I also was pretty maxed out on my credit card which I had known about but had also recently paid all off upon receiving the equity from sale of home...just hadn't posted to CRs yet. I believe when they finally told me they couldn't do the loan, my middle score was a 566 (I was putting down 13% on an FHA) so they told me that's the reason for my pre-approval. In the past couple weeks I was able to get all of the recent late payments from my credit cards removed and am now showing zero balance on all credit cards except $17 on one for Equifax and Trans Union & Experian still have one account that is showing $1900 but should refresh any day now. I just purchased the 3 bureau CR from myfico.com and my current (mortgage) credit scores are EQ: 636, TU: 661, EF: 655. I think the TU & EF will get a small additional bump once the last CC shows zero balance next week. My question: is there a chance that I could receive an automated underwriting approval even though I have recent installment lates on 2 different auto loans? Still planning on putting 13% down on FHA and have about $26K in 401K. Debt to income with loan approx 41%.

martinbowling wrote:
FWIW, I am going through the process of an FHA Loan right now. My mid score was 616, I have 3.5% down & 3 months PITI in cash reserves. I had a 30 day late in Oct 2014 on a Credit One account and a 30 Day late in Nov 2014 on a First Premier card for the monthly fee (I thought the card was closed). I was approved by DU as approved/eligible. got 3.75% interest rate. Last week the loan was finally assigned a loan processor (after a long wait for the appraisal report) and I should be headed to underwriting this week. My understanding is that the 12 months of no lates on credit cards / installment loans is a lender overlay. That FHA only requires no lates on mortgages or federal loans (someone please correct me if that's wrong). Obviously YMMV but the best of luck to you! There ARE lenders who will finance you with lates with a letter of explaniation. ...that is wrong ...read the OPs post ...multiple installation loan lates as recently as March 2015 FHA Single Family Housing Policy
Handbook, issued on March 18, 2015Handbook 4000.1 204
II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
A. Title II Insured Housing Programs Forward Mortgages
5. Manual Underwriting of the Borrower
a. General Requirements
iii. Evaliuating Credit History (Manual)
(1) Satisfactory Credit
The underwriter may consider a Borrower to have an acceptable payment history
if the Borrower has made all housing and installment debt payments on time for
the previous 12 months and has no more than two 30-Day late Mortgage
Payments or installment payments in the previous 24 months.
The underwriter may approve the Borrower with an acceptable payment history if
the Borrower has no major derogatory credit on revolving accounts in the
previous 12 months.
Major derogatory credit on revolving accounts must include any payments made
more than 90 Days after the due date, or three or more payments more than 60
Days after the due date.
(2) Payment History Requiring Additional Analysis
If a Borrower’s credit history does not reflect satisfactory credit as stated above,
the Borrower’s payment history requires additional analysis.
The Mortgagee must analyze the Borrower’s delinquent accounts to determine
whether late payments were based on a disregard for financial obligations, an
inability to manage debt, or extenuating circumstances. The Mortgagee must
document this analysis in the mortgage file. Any explanation or documentation of
delinquent accounts must be consistent with other information in the file.
The underwriter may only approve a Borrower with a credit history not meeting
the satisfactory credit history above if the underwriter has documented the
delinquency was related to extenuating circumstances. ...sorry op ...I wish the pps were correct but afaik my original answer stands ...unless you can document Underwriter acceptable extenuating circumstances which your original post did not reflect, you may be stuck ...the 12 months late rule has nothing to do with lender overlays ...its a published HUD guideline that all FHA mortgage lenders must follow ...and its why your original lender was cornered when he finally woke up ...hth ...note to self ...put this in a damn macro so you don't have to look it up again and again and again and again

Wells Fargo Mortgage?

My plan was to put in a mortgage application with Wells Fargo in March/April however now I'm questioning that decision after doing some searching in this subforum. It seems that WF has a history of denying people for FHA loans in my same credit score range. On the other forums people have mentioned going with a mortgage broker instead. I had two questions - the posts that I read this of were old (1-2+ years) is WF still this difficult to work with? And secondly how do I go about finding a good mortgage broker? I was going to go with WF because I've been a WF customer since 2006 and the company I work for also uses WF. I've been a happy WF customer so I figured I'd just go with them for a mortgage.

frugalQ wrote:
Myfico forum's "resident realtor", StartingOver10, recommends everyone stay away from WF.Yes, that's true.It isn't the pre-approval that is hard because they will pre-approve with abandon - never checking documents (tax returns, w-2s or 1099's, bank statements etc). It is the actual closing. Here in my area there is a huge fall out rate from pre-approval to closing. What happens is the file gets to underwriting where someone actually looks at the documents and then WF can't close. Naturally this is not every loan. Some loan officers are excellent - but it is rare with the big box banks because as a general rule the banks have severely limited the hiring of experienced loan officers. If your builder has a relationship with a good LO at Wells Fargo, then it is likely that the builder would choose a good LO for his buyer clients. The builder wants to close too. No one wants to go through the approval process to only be turned down days before closing. It wasn't always this way with the big box banks, but it became more common after the mortgage meltdown in 2008. Also, right now, the big box banks are much more conservative than most of the regular mortgage lenders. Very conservative. So if you have been turned down by Wells or Chase or BOA at the last minute - don't lose hope. It is most likely due to a lender overlay. For the most part, if you are looking to have a smooth experience and actually close -use a correspondent lender (mortgage banker). They originate and fund their own loans. Go to someone that only does mortgages - not someone that is also a bank teller or does mortgages along with 10 other things. All of this is my opinion based on my experience working with buyers and lenders for many years.

FICO scores used for mortgage - and where to obtain them

So would I just do the FICO Standard Purchase and select Equifax and Experian and that would show me the EQ Beacon 5.0 and Experian V2SM scores that mortgage lenders pull? Just curious as the ones I get through banks listed in my sig are drastically different from the one a lender pulled - they said mine is 740 but wouldn't give me more information or show me the print out.

The FICO scores used for mortgages Equifax Beacon® 5.0Experian®/Fair Isaac Risk Model V2SMTransUnion FICO® Risk Score, Classic 04These are sometimes listed on the tri-merge mortgage report as follows: Equifax/FICO classic V5 FACTAExperian/Fair Isaac (Ver. 2)Transunion/FICO Classic (04)Note: they have been commonly referred to on the myFICO forums and elsewhere as: EQ 04EX 98TU 04 Availablility Equifax: myFICO Equifax FICO Standard purchase, or FICO 3 Report View purchase. Equifax Score Power purchase. DCU provides this score monthly to it's membershipExperian: myFICO Experian FICO Standard purchase, or FICO 3 Report View purchase. PSECU provides this score monthly to it's membership.Transunion: myFICO Transunion FICO Standard purchase, or FICO 3 Report View purchase. Updated 3/10/15 - addition of Transunion (yay!) and some clarifications

FHA Refi

Hi all- I need some advice. I am just over 3 years out from a BK7 (discharged April 2012). Last June, I closed on an FHA mortgage at a fixed 30 yr rate of 4%, paying $226 per month in PMI. Since the PMI rate was reduced in January, I have been working to get refi my loan to take advantage of the lower PMI. I was told by my loan officer that my FICO scores needed to have a mid score of 640 to take advantage of good rates. The versions of my scores here on myfico have my mid score at 656, but I know that there is a different version for mortgages. Unfortunately, that mid score came in at a 629. After paying down some card balances, which were high because we needed to put $ into the house over the past year, she ran a simulation which said my scores would rise into the upper 640's. She pulled the new report today, and it came in at 639. Ugh. So I guess what I need advice on is... will I be able to take advantage of the lower PMI rates? I feel like I am burning $ each month unnecessarily. Is there a good way to do this without being a a 640? If not, are there good ways to raise my scores up a couple of points? Should I be loyal to the broker who helped me get into my mortgage last year, or should I be actively shopping around? And with a mid score of 639 and a BK7 on my recored, would shopping around make any difference? Am I stuck? Thanks for the input! George

Any recommendations of how to find a good broker who can work with someone looking for an FHA in Massachusetts and with a BK7 on his record that is 3+ years old?

Raising Score for Mortgage Pre Approval

Hi, not sure if I posted this under the right forum but here goes....I tried to apply for a pre approval for a mortgage. Looks like I have been monitoring on myfico the wrong version of my scores the lender would use, I was suprised at how many points lower they were. (since then Ive figured out how to see the additional versions on here to see which scores the mortgage lenders use.) Anyway back to my question...it looks like my median score is a 664 my husbands is possibly 654-665? Not sure, Loan officer will not disclose that to me. HOWEVER my question is how can I increase my credit score quickly? In about 30 days? Pay credit cards down to under the 50% line? if I do this next week they should all hit my report again by the end of the month. I just wanted to see if anyone else did this and if it worked? The loan officer said thats probably what was hurting our scores was the ratio of usage on a few of my cards....Thanks!

cg02544 wrote:
Bulldogmom, what type of mortgage loan are you applying for? 680 minimum score is higher than most lenders minimum scores if you are looking for the run of the mill conforming non-jumbo loan.its a 100% first time homebuyers loan offered through a credit union. theres no PMI requirement, however their credit score requirements are a little strict compared to other loans because the mortgage stays with them & isnt sold supposedly so they are taking a risk with you. its 100% financing though no down payment BUT you have a higher interest rate (i guess thats where they make up for the 100% financing?) So my median has to be at least a 680. My scores are 637, 664, 665. so right now my median is 664. Still 16 points away, however my husband and I have a couple cards where the usage is higher so im going to pay that down to get them to 45% usuage verses the 90%, 80% & 70% they are at right now

Stimulating Mortgage Fico Score

I have found the score stimulators to be very helpful in learning how to improve our scores. We have made huge progress and have gotten our scores up about 100 points and final into the fair range. THEN I discover that mortgage lenders use a diferrent blend! Our mortgage scores range from a low/550, median/575, high/610 between the three. I only have 1 year to improve these scores enough to get a mortgage - is there any way to figure out if this possible? Is there a score stimulator for the mortgage combination? Our LTV will be about 70% with income of $100K and no other debt by time of app. Thanks for any help!! Those two lower scores just really scare me.

dakota911 wrote:
I have found the score stimulators to be very helpful in learning how to improve our scores. We have made huge progress and have gotten our scores up about 100 points and final into the fair range. THEN I discover that mortgage lenders use a diferrent blend! Our mortgage scores range from a low/550, median/575, high/610 between the three. I only have 1 year to improve these scores enough to get a mortgage - is there any way to figure out if this possible? Is there a score stimulator for the mortgage combination? Our LTV will be about 70% with income of $100K and no other debt by time of app. Thanks for any help!! Those two lower scores just really scare me. Credit score simulators that are specific to mortgage scores don't exist as far as I know. The FICO 04 scores that are used for mortgage lending will really hammer your scores if you have baddies on your reports. FICO 08 models are much more forgiving of some baddies. I would need to know more about your existing credit to give accurate advice. Oldest credit account? How many credit cards do you have and what are their balances/credit lines? How old are your credit cards? Do you have any auto or installment loans on your reports? Open? Closed? And...How many baddies do you have? What are they?

Title reports and mortgage being reported twice to credit bureaus.

Our mortgage company, Bank of America, is reporting our mortgage to the credit bureaus twice making it appear that we owe twice as much as we do. Everything is the duplicate reports including the account numbers. My husband contacted BOA to have it fixed but they said something about a title report. I wasn't there to hear the conversation and BOA lost the letter that permits me to talk to them (again). Does anyone know what a title report would have to do with our mortgage being reported twice? How can they not know how many accounts we have, we only make one payment a month. Any help you can give would be greatly appreciated. We are trying to get everything straightened out so we can buy a new home.

I've been combing these forums and think I found the real problem. I believe our equity line is being reported as revolving credit. A friend was starting a business and talked us into refinancing our second, smaller mortgage in '08 before the market crashed. It sounded good, we got a better interest rate, a little bit of a credit line, and a tax write-off. Plus we were helping her get her business started. But the credit line was frozen when the housing market imploded and lenders started to panic. We didn't think twice about it because we really didn't need it and I have been paying the interest plus a little more every month. I honestly never worried about it because we'd pay it off when we sold the house. We only have 2 credit cards now, both have zero balance and about a $4,500 combined limit. The equity line is for $20,000 (although we only had about $3,000 available to spend and pay back, I guess the rest was the mortgage that was transferred over). According to the credit report we have a $20,000 limit and owe about $16,500. So basically, despite the fact that we have no credit card debt and this is essentially a mortgage, the credit bureaus sees our debt to credit ratio as 67%!!!
I can't believe the mortgage lenders didn't catch this. I'm absolutely sick over it. Ironically, if we sell the house the equity line will be paid off lowering our debt ratio. But we'll be homeless until his credit rating goes up so we can buy a new place. Is there anything we can do?

Want to buy a home by the end of the year - do I have a chance?

Hi everyone, I'm new to the forums, and only a "lurker" for about a week or so. There are too many factors involved to explain why, but my wife and I want to buy a house by the end of the year; so we're calling December 15 our deadline. As you read through our situation below, please keep the following questions in mind. I have the opportunity to use about $3000 to pay down some debt; what do I pay down, and what do I leave with a balance (and use for purchases)?Should I open a personal loan to pay off some cards and have a "new" type of loan on my credit report? Or will the added inquiry hurt more than the new line will help? I get constant offers from crap places like Prosper, but maybe with a better company...Should I refinance my NJ Class loans at a lower interest rate?Should I refinance my car loan at a lower interest rate or longer term?Should I go into repayment on the Federal student loan now so I can choose the repayment plan with the lowest monthly payment (30-year "extended" or "graduated extended") and have it show up on my credit report with a low monthly payment? Or will it not come up on my credit report as such (will it still show a high payment)? Or will the payment amount be ignored by the mortgage company (I've heard some use something like 1% of the loan amount per month)?Since my wife's employment situation is not ideal, can I get approved with only my credit and income and whatnot (making me the only one legally responsible for payment), but still have "joint ownership" of the property?It looks like a downpayment of 5% on $240k ($12k) turns into about $20k of up-front expenses when you count closing costs and escrow-tax-insurance-somethingorother (technical term, right?). What are the chances that after settling on a price with the seller, they'd accept bumping up the price by the amount of my closing costs, and then paying my closing costs for me? So basically, I'd be financing the closing costs. I've seen it mentioned in another form ("I offered $###k with seller-paid closing costs"). If the chances are low, how else can I reduce those closing costs? I've seen negative points, personal loans and cash advances (not sure if legal to use borrowed funds?), and downpayment-assistance programs (reduce downpayment = more cash available for closing costs, but I haven't seen this offered in NJ outside of taking a second mortgage for the downpayment in certain cases only) mentioned, but does anyone have a definitive list of how to lower the financial burden of closing costs?Based on my income, debts, interest rates, monthly amount I can put into savings, and general "homebuying timeline," when should I get pre-qualified? Please do not limit your advice to that related to the questions above... I hope to learn as much as I can, as quickly as I can 1. Mortgage Credit Scores:
What are your fico MORTGAGE credit scores for each mortgage applicant?I don't really want to pay to get mortgage scores now because I'm not ready to get prequalified... still paying down credit cards, so to me it's useless to get the score until my credit situation is stable. Here are free scores from credit cards and whatnot:
Myself:Discover 6/21: 773Citi 5/26: 744Capital One 6/18: 746Mint.com 4/7: 686 (score to be updated July 7th) My Wife:Discover 6/14: 749 Based on these, and the general deviation between them and mortgage scores (<50 points?) I think I would be able to qualify for a conventional loan, skipping FHA (ugh... mortgage insurance for life?). Some low-downpayment loan programs like Fannie Mae's MyCommunityMortgage (MCM) require higher scores (especially for DU), and I do think I would have the required 680-or-so, but as I mention elsewhere in this post, I haven't found an NJ MCM lender (other than brokers). But ideally, a 3% downpayment (like MCM) and reduced (compared to FHA and conventional) MI (again, like MCM) would be ideal... Obviously, there's no guarantee that these are anywhere close to the mortgage scores, so once I feel like I've paid down my cards as far as I need to (i.e. I feel I'm ready to get pre-qualified), I'll make sure to buy the mortgage scores. I'm thinking that point will be in about a month, but that depends on your answer(s) to question 8 :\ 2. Credit Negatives:  None except for a late payment more than 24 months ago on a student loan that was in "interest-only deferment." I believe that's on TransUnion, which is what Capital One pulls. 3. Gross Income./4. Source of income.   Myself: $65,000 (+ bonus that some years is as low as $500, so won't include it)My wife: $13,000 (±$2,000) All income is from employment (hers is part-time, and with two retail jobs, very likely to vary; mine is a salaried position). I may get an added part-time just to boost my savings, but it wouldn't be reported to them (I'm thinking a 3-6 month deal). 5. Monthly debt payments. Here are all my cards and loans, including month opened, APR, balance, limit, and payment. All balances as of today: Currently in my name w/wife as authorized user:Elan Financial CC, opened 6/2013, 20% APR:$-10 ($10,600 CL); payment $0Discover It CC, opened 5/2013, 15% APR:$2,900 ($5,000 CL); payment $59 **current APR 0% since entire balance was transferred from Elan at one point with a 0% offer that expires in AugustCapital One Quicksilver CC, opened 2008, 16% APR:$678 ($4,000 CL); payment $25Citi ThankYou Preferred CC, opened 8/2013, 14% APR:$700 ($2,600 CL); payment $25BankAmericard Cash Rewards CC, opened 8/2013, 15% APR:$616 ($2,000 CL); payment $25 My credit limits all went up within the last 6 months. Before then, they were $6,600 for Elan, $4,000 for Discover, $1,000 for Capital, $2,000 for Citi, and $800 for Bank of America. BofA was the only one that didn't automatically raise my limit or tell me I should request an increase, and when I requested it, they were the only ones that hit me with a HP. The Kay card below has also had a constantly-rising credit limit, from an original of $500, to $2500 a year ago, to the current $4000. Just in my name:Kay Jewelers CC, opened 4/2012, ridiculous (25%?) APR:$0 ($4,000 CL) - payment $0Macy's CC, opened 5/2014, 25% APR:$0 ($600 CL as of March) - payment $0M&T Auto Loan, since 9/2013, 5.3% APR:$10,310 ($14,218 original) - payment $231 (72 months total)HESAA/NJ Class, in repayment since 6/2015, 7.5% (approx. avg.) APR:$13,014 (originally less, but interest has accrued while in school) - payment $131FedLoans Direct Loans, in grace until 11/2015, 5% (avg.) APR:$56,237 (originally $52,000, but interest has accrued while in school) - payment $403 under standard repayment, <$250 under extended repayment ("Mortgage Letter" shows $403 unfortunately, since I can't pick a repayment plan now unless I forfeit the rest of the grace period) Wife's name w/me as authorized user:Discover CC, opened 5/2015, ridiculous (>20%) APR:$1,304 ($1,500 CL) - payment $35 So basically, I have a crapload of debt and quite a few recent inquiries. However, my credit score shot up when:The 5/2013 accounts aged to 2 years (and thus the inquiries were removed);I paid down cards and increased limits; usage went from ~$13k of ~$19k revolving limit used to about ~$6.5k (at one point) of about ~$25k (at one point) revolving limit used; now it's at about $5k used of $29k;I was added as an authorized user on my wife's card (at card opening).I think those point to a nice boost to the credit score when (1) I pay down the cards even more [to end of July], and (2) the three inquiries from BofA, Citi, and M&T disappear [2 in Aug, 1 in Sep]. Sounds like my pre-approval should be early October, making my intended closing date near-impossible . Maybe I can still qualify with a good rate despite the inquiries?
6. Employment (for those who are employed). Myself:Went from $16k/year to $26k/year part-time while in school, now $65k/year (as of last month) and salaried, all at the same company for 4 years now, and the boost was due to graduating; surely they can throw out the 2-year requirement? I plan on staying here for many years, and am about 99.9% certain there will be no reason for that income to drop in the forseeable future. Wife:Nothing's sure, and it's very low pay. As noted above, $13k/year at the moment, but she's unhappy with both (retail... ugh) jobs, so that's not guaranteed. She's looking for a break and a decent office job, but even if she gets it, I'm pretty sure the short length of time that she'd have it before getting a loan would make the difference in income useless. I'll add here our budget: In our current situation, with about $5000/month net income ($1k from her, $4k from me), we can comfortably save $2000/month. July and October are 5-week months, so that goes up to $3000 those months. However, I'm using the $3000 surplus from this month to pay down cards. So that's $7k added to savings thru October or $9k thru November. Hypothetically, I could "skip" paying off cards (or pay down all but Discover) in order to boost up savings.
7. Assets/Reserves. This is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway). Savings: $5000Checking: Everything that goes in, goes to paying credit cards or into savings. I haven't made a purchase transaction with a debit card in over a year because I get points on all my cards. So call it $0 available for moving to savings.
8. Location:  This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items. Central New Jersey (Somerset, Middlesex, possibly Hunterdon counties). I don't know where I can find a "conforming" 3-3.5% down loan here that's not FHA, since no local banks seem to advertise something like it. I've been looking at MyCommunityMortgage and they seem awesome - 3-5% down with mortgage insurance that is typical for 10-15%-down conventional loans - but when I do search for "Fannie Mae + your home state" as recommended, all I get is HomeFirst and general info on MyCommunityMortgage (since the income/value limits are higher for NJ, that info gets included in all their documentation on the program).
9. Property Description:  Single-family, "single home" (no townhouse/condo). No foreclosures, short sales, or other "as-is" situations.
10. Property Value.  $200,000-$250,000
11. Occupancy.  Currently? Rent $550/mo. As far as every credit application I've filled out is concerned, it's my responsibility. However, since the contract IS in both our names, I could hypothetically call it $275/mo (even split) or $440/mo (split based on relative income). Not sure what that would help/hurt with; I've heard of sticker shock being a concern for some, but if all goes according to plan ($2000/mo into savings, basically the amount the mortgage+tax+insurance would be), I don't see that being an issue. 12. Transaction Type. Purchase - primary residence. ----------------------------------------- Sorry for the extremely long post... and thank you all in advance

Georgie_Boy wrote:
Hi everyone, I'm new to the forums, and only a "lurker" for about a week or so. There are too many factors involved to explain why, but my wife and I want to buy a house by the end of the year; so we're calling December 15 our deadline. As you read through our situation below, please keep the following questions in mind. I have the opportunity to use about $3000 to pay down some debt; what do I pay down, and what do I leave with a balance (and use for purchases)? You want to get as many of your ccs to zero as you can ...optimum scoring is one account carrying a balance of 3-9% of your CL, all others at zero ...the mortgage lenders will count each account with a balance as a monthly debt due equal to your minimum payment when calculating your dtirs ...those minimum payments quickly add up and can seriously impact how much you can get approved for.Should I open a personal loan to pay off some cards and have a "new" type of loan on my credit report? Or will the added inquiry hurt more than the new line will help? I get constant offers from crap places like Prosper, but maybe with a better company...Ignore the personal loan offers. You have a decent credit mix now between your ccs and auto installment loan. A personal loan would only hurt your scores at this point.Should I refinance my NJ Class loans at a lower interest rate? Not personally familiar with these but it looks like a SL from the other info you've provided. Generically you should refinance when the total cost of doing so is beneficial to you. That said, a mortgage lender is going to look at total student debt, and use the greater of your current payment or 1% of the total ...thus refinancing for mortgage purposes may not result in any dtir benefit to you. Should I refinance my car loan at a lower interest rate or longer term? If this is a new car loan, yes ...if its a used car loan, it depends on age and value because your current rate isn't outrageous for an older car loan ...generically, if you can refinance to a lower monthly payment at a reasonable cost, you should do so in order to lower your dtir ...but its a trade-off because the HP will probably cost you a few points on your scores.Should I go into repayment on the Federal student loan now so I can choose the repayment plan with the lowest monthly payment (30-year "extended" or "graduated extended") and have it show up on my credit report with a low monthly payment? Or will it not come up on my credit report as such (will it still show a high payment)? Or will the payment amount be ignored by the mortgage company (I've heard some use something like 1% of the loan amount per month)? All of the govt guaranteed loan programs have recently moved to using the higher of your current payment or 1% of the total in your dtir calculations ...do the math and act accordingly. Be wary of any lender that is not using the higher figure when giving you preapproval numbers, uw will inevitably catch it and it could torpedo your loan after you've signed a contract and spent on prepaids and fees.Since my wife's employment situation is not ideal, can I get approved with only my credit and income and whatnot (making me the only one legally responsible for payment), but still have "joint ownership" of the property? She is either on the loan or not ...you can't have it both ways. At the time you apply, your LO will look at both of your incomes and tell you what will work best in your situation. As long as her income can be documented via tax returns, it should be "useable"It looks like a downpayment of 5% on $240k ($12k) turns into about $20k of up-front expenses when you count closing costs and escrow-tax-insurance-somethingorother (technical term, right?). What are the chances that after settling on a price with the seller, they'd accept bumping up the price by the amount of my closing costs, and then paying my closing costs for me? So basically, I'd be financing the closing costs. I've seen it mentioned in another form ("I offered $###k with seller-paid closing costs"). If the chances are low, how else can I reduce those closing costs? I've seen negative points, personal loans and cash advances (not sure if legal to use borrowed funds?), and downpayment-assistance programs (reduce downpayment = more cash available for closing costs, but I haven't seen this offered in NJ outside of taking a second mortgage for the downpayment in certain cases only) mentioned, but does anyone have a definitive list of how to lower the financial burden of closing costs? This is very specific to the loan program ...conventional with 5% dp limits seller concessions to 3%, FHA is 6% regardless, USDA is technically unlimited ...be aware that every lender will have their own overlays which may affect those numbers. It is also affected greatly by your market conditions which at the moment vary greatly by your locale ...in a buyers market, you can expect seller concessions ...in a sellers market, probably not. USDA offers the best govt guarantee program for closing costs since they will allow you to include closing costs in the loan up to the appraised value. New Jersey's web site is screwed up (at least for me) and I can't nail down exactly what dp/closing cost assistance programs are available to you but it looks very dependent on the specific location you are buying in.Based on my income, debts, interest rates, monthly amount I can put into savings, and general "homebuying timeline," when should I get pre-qualified? DO NOT get "pre-qualified" ...get "pre-approved" ...a pre-qual is virtually meaningless ...a pre-approval means they've actually looked at your documentation and, short of verification, are reasonably sure they can get you to closing ...its a huge difference ...as far as when? ...yesterday would have been great ...rates are rising ...its almost certainly going to get worse ...so bite the bullet ...find a decent realtor in your target area, ask them to recommend lenders they have worked with that can actually close their loans ...talk to those lenders ...get a pre-app ...go shopping ...if your credit scores/dtir improve significantly because of cc paydowns, ask your lender to rescore you ...mortgage pulls within 30-60 days all count as one HP. Please do not limit your advice to that related to the questions above... I hope to learn as much as I can, as quickly as I can 1. Mortgage Credit Scores: Its essential to your question of "when" that you know your actual mortgage scores ...the Discover scores are actual Fico cc scores, the others are FAKOs afaik ...but the Fico cc and mortgage scoring models differ in several important ways and vary easily by +/- 50 points depending on what is in your CRA files ...mine actually track fairly closely but others have seen very negative differences ...its worth the $40 imnsho to know where you actually stand ...anything you do to improve them in the next month will only help but is not sufficient reason to delay ...again imnsho.  2. Credit Negatives:  Have you tried to have the late removed from the CR? Depending on the SL source, some programs have been very responsive to GW requests after a good payment record has been reestablished ...ymmv but you lose nothing by trying.  5. Monthly debt payments. Get the Discover to under $500 if possible ...and ask for a CLI asap ...Discover has been handing them out like candy lately ...keep a balance open 3-9% if possible but if not, as low as you can ...its more important to zero the other ccs first.Capital One Quicksilver CC, opened 2008, 16% APR:$678 ($4,000 CL); payment $25 ...pay it to zeroCiti ThankYou Preferred CC, opened 8/2013, 14% APR:$700 ($2,600 CL); payment $25 ...pay it to zeroBankAmericard Cash Rewards CC, opened 8/2013, 15% APR:$616 ($2,000 CL); payment $25 ...pay it to zero HESAA/NJ Class, in repayment since 6/2015, 7.5% (approx. avg.) APR:$13,014 (originally less, but interest has accrued while in school) - payment $131FedLoans Direct Loans, in grace until 11/2015, 5% (avg.) APR:$56,237 (originally $52,000, but interest has accrued while in school) - payment $403 under standard repayment, <$250 under extended repayment ("Mortgage Letter" shows $403 unfortunately, since I can't pick a repayment plan now unless I forfeit the rest of the grace period)Its almost certain that the last two will be seen as a combined 69k SL with $690 used in your dtir calculation Wife's name w/me as authorized user:Discover CC, opened 5/2015, ridiculous (>20%) APR:$1,304 ($1,500 CL) - payment $35 ...pay this to zero Credit score almost certainly isn't your major problem ...debt-to-income is Total income = 78k =6500 moTotal mo debt = 134cc/231auto/690SL= 1055 + ~1600 mo PITI+MI (220k@5%/5%dp) NJ taxes are higher than national avgs = 2655 total monthly paymentsThats a be ratio of 41% ...ideal is <36% but many programs will go higher
6. Employment (for those who are employed). Do not count on reason and logic being used in the mortgage process ...this will come down to finding a lender who will work with you ...if the 4 yrs is same company and the line of work matches your degree, it may not be a problem ...but its one reason you want to get the pre-approval process going now ...to find a lender who knows your exact situation, has reviewed the documentation, and given you a pre-approval knowing all the facts ...av pre-qual will look at your score, ask you for your current income, and promise you pie-in-the-sky until the rubber meets the road and his uw upchucks over your employment history ...goodbye loan and all the money you paid ...get a real pre-approval  8. Location:  Hunterdon county has a lot of areas eligible for the USDA program and your income is well within the limits ...if the commute is acceptable, its a good program. Somerset/Middlesex are mostly ineligible. The NJ website for dp assistance programs isn't working for me but take the effort to ask your prospective lenders about these programs and their experience with them. Any that pooh pooh them should be scratched off your list. 11. Occupancy.   Sticker shock WILL be an UW issue but you appear to have it addressed. Current rent will not factor in to dtir for your mortgage.  ----------------------------------------- Sorry for the extremely long post... and thank you all in advance ...I could only wish that everyone would supply as much info as you have ...please feel free to ask if you dont understand ofr if I misunderstood something ...hth

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