Highest score with 1 derog..

Alex, I am a Real Estate Consultant, NOT a mortgage underwriter, but maybe I can help a little. What is the purchase price of the home? What type of loan are you trying to get? FHA, Conventional, etc? Do you have a checking acct., savings acct., both? What are you going to put down? Oh, and where do you live? Your scores look decent.

 

Alex, I'm in Houston, too! ) Cinco Ranch area, originally from Humble/Kingwood & we are about to move back. . .homesick. . .I-10 traffic (yuk!), etc.

BACK TO YOU. . .

It's hard to say about the derog account. It "would" be a gamble to dispute it, you're right.

I would venture to guess that your scores are borderline, between "okay/good" and "even better". A more "seasoned" Creditnetter could better answer that.

Are you building a new home? If so, are you using their lender? The reason I'm asking is because although, you might think that they are offering you incentives to use them (i.e., pay part of closing costs, pay your title insurance, etc.) it "does" limit you to ONE company to choose from.

Have you already talked to a morgage broker? Have they already pulled your credit report, etc?

There is a girl that I do business with and they are a great mortgage broker company to work with. It never hurts to compare. (BTW, I don't get a "kick-back" or anything from her, they are just extremely client oriented and I like to work with her.) It really doesn't hurt to call around and see who can offer you what. I know some companies will even match what the builder's mortgage company will offer. "Her" company has. I have had clients who have switched after mortgage application has been submitted because another company offers more. Make them COMPETE! ) Different lenders have different criteria that they use to ultimately score you by. Some lenders are a little more lenient, while, of course, others, more strict. Everyone has different needs and they'll find the best deal for you! Plus, she's super sweet! I felt so intimidated when I got my first mortgage! She makes you feel at ease. I'd be happy to give you her name and number, if you're interested.
We are basically in the same situation that you are in. I have been doing research on FICO and other scores to try and figure them out. YEAH, RIGHT! At any rate, here is some info that I keep for a basic reminder. I got it off of MortgageExpo.com Can't really give a recommendation on the site. I only visited it once.

The following are some factors that affect your FICO score:

Short credit history
Payment delinquencies
Maximum credit balances
Too many -- or too few -- open accounts
Too many -- or to few -- revolving accounts
No recent credit card balances* Too many recent inquiries* Tax liens, judgments and bankruptcies.

Your FICO Score My Affect the Terms of Your Loan

In addition to getting approved, your FICO score could affect the type of loan program you are eligible for, as well as the terms of your loan. Some lenders reduce points on a loan for higher FICO scores, while others add points for lower scores. When they review your loan application, underwriters consider many factors beyond your FICO score. They may request additional documentation, and may even view your FICO score differently if you make a large down payment, have a low debt-to-income ratio, and show a consistent history of saving.

Mortgage companies smile upon people who, after down payment and closing costs, have at least 2 months of mortgage payments in reserve. Looks like you probably will.

Sorry this is so long-winded. A lot of this is "basic" and information you may have already known, but maybe it will help others who read this thread.

Keller

 

The answer to your question is, No. They just want you to start pursuing the financing because they don't want to be sitting on a house and paying the interim financing because your loan isn't ready and they can't close on it. A lot of people aren't like us, in that we "look" at our credit BEFORE we go to obtain a loan. Society doesn't look at their own credit. For some reason they let everyone else do it, though.

I would just continue to do what you are doing. When you get your credit to where you want it to be, then apply. However, you can start shopping NOW. Call around and see what other companies will do for you. You have a pretty good idea of what your scores are going to look like. Worse case scenario, they stay the same, which isn't too bad. You'll end up paying a little more depending on the lender. If, after you sign a contract, the builder starts questioning you about whether you've got your financing down or not. Just tell them, "Yes, I'm working on it".

I would go ahead and interview companies now so that you'll already have one picked out when you're ready. Also, they CAN pre-approve you without pulling a "hard inquiry" on your credit. Just like those credit card promos that you get in the mail. Ask them for a Pre-Approval letter to give the builder, if the builder starts hounding you before you're truly ready. All they do is ask you what you make, what's the sales price, how much are you planning on putting down, and what other debt do you owe that will not be paid off in 10 months or less. They don't pull a hard inquiry on your credit. As a matter of fact, if you just want to make yourself feel better, tell them not to. I am going to give you the name and number to the girl I was telling you about. Even if you don't end up using them, it'll get you started in the right direction and she'll answer all of your questions. Just give her the scenario and be honest. That's what I did. I told her that I had some things that I needed to fix on my credit and that I was shooting for 750 FICO. At the time, I didn't realize that 750 is really high. 700 - 715 will be just fine for me. I should still be able to get the best interest rate available. I am going "No Doc" on my loan, so I really need good scores to get a good rate.

Also, she mentioned that if I didn't get my scores exactly where I wanted them, to keep my payments down to where I want them, I might want to do an ARM and then, when my scores are EXCELLENT in 2 to 3 years, re-finance. ) I'll probably do that. ARM interests rates have been known to drop in the high 5's this year!! You can't beat that! I know that my scores and my finances (God willing), are only going to get better in the future, so this is something I am going to consider.

You might think about doing something like that as well. Depending on how long you're going to live in this home. You can run scenarios by her and she'll give you the best options available. Her name is Candi Beasley. The name of the company is Home Mortgages. Her phone number is 713-782-3131.

 

I am sure your contract says something along these lines: Within 3 days from the date of this contract purchaser shall apply for a mortgage loan blah, blah, blah. . . seeking terms which are reasonable within the relevant market at the time. Blah, blah, blah . . . There's your way out . If you can't qualify for the "reasonable" terms, then you can elect to void the contract. Let me clarify myself since this is a public forum. If your scores aren't high enough to get the best current market interest rates, then it's not considered "reasonable terms". Since the word "reasonable" can mean different things depending upon who you talk to, in a real estate contract the term (usually) means, current market rates. I "have" learned not to make blanket statements. I've had to eat my words before. )

I have some other info that I wanted to send you. Your email isn't active. If you'll email me, I'll get back with you.