My credit files are WAY better than they used to be, and I'm wondering if I might qualify for a mortgage. I currently have only 1 paid charge-off from 1998 on Equifax, and have a satisfied judgement on TU and Exp from 98. All three have a paid collection from 98. 98 was a bad year, what can I say. My scores are 610, 622, and 640, respectively. I have 6 open accounts, all credit cards, totaling around $2500 in debt, which is my entire debt. Three of these are old Capital One "rebuild my credit"cards, with limits of 200, 500, and 600. I plan on paying all of those down and possibly closing them within the month. I recently (in the last year) got two cards which are close to prime, if not prime, from Household and BofA. I only have about $2000 to put down, if that, and I make about 40K a year. Been at my current job for 6 years, apartment for 9 years, always paid rent on due date. What are my chances? Will I get a decent interest rate? I'd like to have an idea, before going to the bank. I appreciate the expertise rampant here.
Pay the cards off first. Your FICO will rise after the balances are reported. After that you need an expert on mortgages to answer that question. I am probably not telling you anything that you already do not know. GOOD LUCK!!!
Mike2, You might want to look at FHA. They have fairly liberal qualifying, and you only need 3% down. The downside is mortgage insurance. Still, FHA rates last time I checked were 5.5% which is pretty darn good. In my experience mortgages are pretty easy to get as long as you don't have unpaid judgements. Most lenders requrie you to satisfy any unpaid judgements...not so with charge offs. The whole issue is not can you get a mortgage, but what rate will you get. There are lots of sub-prime lenders who will write anyone 90% and 95% Loan-to-value mortgages, but rates can be as high as 11%.
Your middle score is greater than 620, so you should not have a problem qualifying at all. There are a lot of different loan programs available for people with 620 credit or higher. Some lenders will make you pay any unpaid chargeoffs or collections ... so be prepared for that. peace, delilah
Mike, go after the paid collections with the Nutcase Series (read the FAQ at the top of this board). To your delight, you may see those simply drop away. Doc
There is a very good mortgage forum where you can talk to some brokers for excellent advice. I just don't know how to get you there as I am not that computer literate. It s in the credit boards I think through the public forums at the top of the screen. I think based on what I have learned from them is that you'll be able to get something decent. Also, you may not want to close the cards that you've had for a while. Other people probably can advise you better than me, but I think having older accounts helps your score and if you close them your score will drop.
Mike, I'm a mortgage lender. If everything is as you describe it, you should have no problem getting a conforming loan to buy a home. Your scores are kinda low, so you would have problems qualifying for the 100% loans (except sub-prime) but you're fine for the standard FHA or conforming loans. Don't close the credit cards. If you pay them off, just stop using them. The open lines of credit help your score. Save money. Buying a house is expensive. Down payment, closing costs, moving expenses...it all adds up. Cash on hand gives you flexability and makes the deal go down faster. Good luck!
Re: Can I get a mortgage? (kinda lo I believe, though don't know for sure, that if I reduce my card debt to zero or close, that I may be able to get my scores up closer to the 650 area. I could pay those down, and see how it affects my scores. It would just mean living like a pauper for a couple of months, which is ok if it means I can go into the bank in three or four months without that grinding pit of fear in my gut at being turned down. In addition to what I wrote above, I will be asking for this loan from a credit union where I have been a member for 9 years, and have a current auto loan with, which has always been paid on time, even ahead of time. I had a problem last fall, for which I needed 2K fast and would pay it back in 2 mos., and they had no problem giving it to me on signature, so I hope that's a good sign
Re: Can I get a mortgage? (kinda lo Also, if it's helpful to anyone forming opinions, I'm lucky enough to live in an area of reasonable housing prices, meaning I will be looking at homes in the 85K to 100K range.
Re: Re: Can I get a mortgage? (kinda lo Paying off the cards is likely to help your score, closing them isn't. It's something of a myth that closing credit accounts helps your score, it doesn't. Part of your score is the relationship between your balances and your balance limits. Closing accounts hurts that. Do you have any money saved? If so, go buy a house. Let go of the fear, you qualify.
Re: Re: Can I get a mortgage? (kind I have, in my "house buying account", $2,018.46 as of today. I have, as I said, $2440 in consumer debt spread over 5 cards. I could reduce that total to around $440 if I minimized my checking account, and sold a laptop I don't use much to a friend of mine. On the other hand, I could boost my "house account" to $4018.46 by sending the money there.
Re: Re: Re: Can I get a mortgage? ( The friend would kill me if I sold it to anyone else, he's been bugging me for it. It's a P4 1.4Ghz, with all the bells and whistles. He's giving me a grand. I already have 4 other PC's, plus I just got a new laptop for work from my company, so I need to ditch it.
