Question about pre approval (borrowers, loans, debt, home)
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So many people get 'pre-Approval' letters from their bank that they don't carry much weight. What you want is a "pre-Qualified" letter. The pre-Approval letter says, "Your scores etc., make you a likely candidate for a loan of $$$." The pre-qualified letter says, "We are ready to make you a loan in $$$ amount, as soon as you decide on a property."
I bought my house with a lower credit score, FHA, about four years ago. My credit road has been bumpy but i have zero collections and the score is considered fair. We are selling this house to buy or build a bigger one. With the sale, I should have about 50k for a down payment. My question is on a 75k yearly salary, what kind of pre approval can be expected for a “fair” credit score and that down payment. I know it is not exact but, my first pre approval when I made less money was 180k. Now with the market being higher I want to know what I need to do to see around 300k pre approval. Id like to stick with FHA again
Quote:
Originally Posted by MortgageInFlorida
Op, what state are you in? And what kind of credit score you mean by “fair”?
I wondered that too, so I googled. "Fair" appears to be just one step above "very bad"; it indicates a score of 580-669. Yet the OP wants to build a bigger house so wants a preapproval for 67% more than his last preapproval ($300k compared to $180k).
OP, you might want to get your credit more in order before applying for a new loan, especially since you've only been in your current house for 4 years. Why is your credit so poor? I'm not trying to be rude; it's just that the way you worded it -- e.g., "I have zero collections" -- is odd because MOST people have zero collections. It sounds like you must have quite a few late payments, a high utilization rate, or similar blemishes. These things matter because from what I've been hearing and reading, lenders have tightened up regulations due at least in part to COVID (e.g., when I refinanced my house a few months ago, I had to get a bank-generated COVID-related letter signed by my employer).
I wondered that too, so I googled. "Fair" appears to be just one step above "very bad"; it indicates a score of 580-669. Yet the OP wants to build a bigger house so wants a preapproval for 67% more than his last preapproval ($300k compared to $180k).
OP, you might want to get your credit more in order before applying for a new loan, especially since you've only been in your current house for 4 years. Why is your credit so poor? I'm not trying to be rude; it's just that the way you worded it -- e.g., "I have zero collections" -- is odd because MOST people have zero collections. It sounds like you must have quite a few late payments, a high utilization rate, or similar blemishes. These things matter because from what I've been hearing and reading, lenders have tightened up regulations due at least in part to COVID (e.g., when I refinanced my house a few months ago, I had to get a bank-generated COVID-related letter signed by my employer).
sorry its been a while, credit was fixed. As I looked further into it, the Department of Education relisted all my old paid loans as active with the balance owed, since I had already paid them I did not pay anything further, which resulted in lates. When I called, they said it was an error that alot of people experienced. One simple phone call and they were taken care of and I saw a huge boost in my scores. and when I say they relisted them, they also duplicated every one of them too.. but its all taken care of
sorry its been a while, credit was fixed. As I looked further into it, the Department of Education relisted all my old paid loans as active with the balance owed, since I had already paid them I did not pay anything further, which resulted in lates. When I called, they said it was an error that alot of people experienced. One simple phone call and they were taken care of and I saw a huge boost in my scores. and when I say they relisted them, they also duplicated every one of them too.. but its all taken care of
Yes it was, the only difference was mine were already paid off, it reactivated when this happened as if the accounts were all open, then the duplicates error on top of it. They did take care of it quickly tho!
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