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Amex: Use for everything for the reward points (pay off weekly) but stopping this now as the 1,200 limit just reported a 700 balance on credit karma and it brought my credit score down to 635
We have 20k combined in our accounts (not in savings, but in our actual checking account)
Issues:
When I was 18 and trying to pay for school I racked up around 3k worth of credit card debt. I settled the debt on two of these cards and paid the rest off ( so many late payments) but this was 6-7 years ago and it's not fallen off my report yet. I believe a few are slated to fall of sometime this year.
My grandfather passed away last year (he along with my grandmother raised me) and she has started putting in 1-2k a month into a my secondary checking account for us to use as we see fit (wedding,house etc)
Currently, I have three accounts in collection totaling $568 (from 2 from 2009 and one from 2012 in dispute). One is a mistake and I have the paid in full letter, the other two are small medical bills from an md who was greedily coding visits inaccurately for more payment (I used to manage and train medical billers so I know that the visits were inaccurately coded) and I have been back and forth with the collection agency about not paying these. I asked my loan officer if I should go ahead and pay them to clear my credit, but she said since it's under 1k don't touch them since it could update the date in their system.
I have always believed since I screwed up my credit and have so much student loan debt that I would not qualify for a mortgage so I am wondering if this is too good to be true. The broker also told me that checking the credit for pre approval would not impact my credit score, but I got an alert that now I have two hard inquiries on my report in the last two years. I'm scared to get another interest rate from a different bank/broker if it's going to lower my score.
The mortgage broker asked us for all the information, tax returns,W2, last 2pay checks, two months worth of bank statements etc, but still I would hate to waste anyone's time if we got to UW and there was an issue with closing. The idea of that makes me sick.
I am looking at houses now but will not purchase anything over $225,000. I don't really have anyone in my family that I can ask about these things so I've come to you internet gods. I have been current on all payments for the last 4 years (disregarding the medical bills). Please let me know if you have any advice or if you may see any possible issues.
With the FHA program they have no minimum credit score acceptance. It all depends on what banker you talk to. Some take credit as low as 580. Credit inquires for a mortgage does not affect your credit if you are pulling for the same thing each time. If you go around pulling for credit card, auto loan, mortgage, ect. then your credit will take a hit. As far as for student loans, if there is a payment plan in place there going to use that in your debt to income ratio. Rarely do medical collection get taken into consideration. You will not be wasting anyone's time. If they are a good lender and are doing their job currently they should be able to walk you through each step and let you know if the UW has an issue how to fix it and what you will need to do to be able to get into a new home.
Thanks, even with the payments 590 (out of deferment) that's the only debt we have besides. Cars are paid off and we only use Amex for rewards and pay it off during transaction.
Since I'm quite new to the process could some explain to me the amount of reserves one would need in bank account after closing? Is this dependent on the amount of the house?
I do think your loan is possible, but I have to admit to a few raised eyebrows. It's June 4.........and the girlfriend was unemployed for 4 months this year? That means she just went back to work. What kind of work is she doing? What was she doing before, how is she paid (salary, hourly?)
Look, my intent is not to increase your angst, but I also don't have it in me to pat you on the head and say, "no problem, don't worry about a thing."
In almost every paragraph you wrote, I see something that the UW is giong to dissect and require documentation.........is a loan possible? Absolutely. But it's also has the characteristics of a train that can jump the tracks if someone isn't keeping their eye on things.
My DNA is defensive processing, identifying and attacking the problems. I hope your loan officer is doing the same.
We both are salaried at 50k with bonuses (which aren't counted since yet since they haven't been stable for 2 years) and on top of my 50k base pay I am eligible for OT
Usually the investors want 3 months principle and interest set for reserves.
By interest and principle does that include PMI?
These are pretty silly questions for seasoned mortgage aficionado's, but I unfortunately don't have the family to ask and most of the friends I know that got their FHA loan made it sound like they paid 8k and had a house. I don't think it's as simple as that so I want to have a good idea before I start considering making an offer.
At the moment I see a home for 240k that I really like, but I also don't want to be home poor.
Can you shop around for insurance quotes before making an offer on a house or is this frowned upon?
By insurance, I assume you mean the fire policy? The problem with that is the exact home drives much of the premium. Type of construction? Distance of nearest fire house? Nearest fire hydrant? Prior registered claims on home? Deductible?
There are too many variables to nail it down. You could pick a property similar to what you want and get estimates to get an idea, but you start from scratch once the home is identified.
People are strange. If they don't make it sound too easy, they make it sound like torture and take delight when they stir up your angst. Good friend, huh? But it happens all the time. Tune out all but your trusted advisors, including here and unsolicited advice. Call your loan officer if something sounds *off* when talking to someone. Don't panic, quietly verify. It takes real talent to smile at someone trying to pick at your deal....but don't let them get you...smile..say thanks, they gave you something to consider...hang up or go in the other room, call agent or loan officer, relax, repeat.
Even if you had the perfect profile, you should still be leery. I wouldn't be so concerned with the medical collections but that your fiance was sporadically unemployed. The only real advice I can provide is not to trust anything the loan officer or processor tells you. Expect the worst (sorry, I'm a pessimist). The underwriter is the only person that matters, the rest are generally just ignorant document carriers or salesman. If you begin to have communication problems with them (as in they don't answers calls for days, send you straight to voicemail, give extremely vague replies to emails), move on. Just go to a different bank, do not waste your time. Try to get your file to an underwriter as quickly as possible. My husband and I have been in a living nightmare for the past eight weeks while having 40% dti with the new mortgage payment and middle scores in the 700s. We're set to close tomorrow and the title company hasn't heard a peep from the bank lol
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