Ok, fiancee and I are going to buy a house. He's got good credit, mine is better than it used to be. I have a 633 FICO, clean experian, but on my TU, I still have a paid collection and an unpaid charge off (the charge off is from 1998). ANYWAY...my real question is, what should I do to prepare for applying for a mortgage. Should I close accounts? Should I stop making inquiries. Should I dispute again before we apply for loan? Will my neg items significantly affect our chances? THANK YOU THANK YOU THANK YOU for any help!!! Flagirl
Has long as you don't have any negative information under two years old you should be okay. The lender will probably want you to pay off the unpaid collection so that creditor cannot come after you later and get a lien on your house. I would stop applying for credit and if you carry balances on your credit cards begin paying them down. And just begin saving - the downpayment is the hardest. And once you're approved don't buy anything on credit. The lender watches you like a hawk and questions almost every transaction. Hope this helps and good luck. Dani
wow! That helps..I knew that I shouldn't apply for anything after the first pre-approval until the closing, but I didn't know that I shouldn't buy anything on credit. I wasn't planning on it for christmas, anyway...well I was going to try not to... Savings-wise, we're probably going to use my fiancee's VA loan, so from what I'm told, we don't need a down payment, just the "funding fee" that I believe is like 1 or 2% of the mortgage. Not quite sure on that one either, though. Thanks Dani!
I'm sorry I didn't mean stop using all your credit just no big purchases. When you go for preapproval the lender takes all your assets and adds them together and then takes all your liabilities (cars, credit cards, loans, etc.) and adds them together. This allows them to see how much house you can afford. If you significantly increase your debt it could affect your loan. Our lender told us not to use our credit, but a nice dinner out or a new pair of shoes shouldn't hurt your chances. I should have made myself clearer. Good luck and keep us posted. Dani
ReANI What would be considered assests? Since this will be our first home purchase, we don't have a big asset like a house. Does furniture and electronics count? That's about all we have. The cars aren't paid for yet either. Thanks!
Re: ReANI We didn't have any assets either, but our lender asked us the value of our autos (not yet paid), furniture, bank accounts, and any other accounts like IRAS or stocks. Dani
Re: ReANI Question re: paying off charge off/collection: I know they want you to have everything paid down so the creditor can't come after you at a later time...however, my confusion lies in the SOL's. What if it's a 5-6 year old debt, obviously passed the SOL's?
