Jump to content

Need advice, mortgage/fico issue


Recommended Posts

It's time to buy a house...

Have been working on my credit for a few months, and got pretty much all my derogatories deleted...problem is, one of the older accounts that I disputed as never late got deleted entirely...hurt me more than it helped. (Separate issue...any thoughts?)

Anyway, I need some direction in regards to some high credit card balances that I have. I know this is putting a drag on my scores as well, but am unsure whether to use my available cash to pay these down to improve my scores and debt ratio, thereby needing a low/no down mortgage; or to use it towards the down payment, scores be damned. And if I were to use it on the credit card debt, would I be better served spreading it around to get many accounts down below 50% usage, or paying off some completely?

What to do, what to do?

P.S., I'm a first-time buyer...and I need more house than I can get with an FHA

[Edit by dgold21 on [TIME]1056765830[/TIME]]

Link to comment
Share on other sites

we are getting ready to buy a house too :) and I just posted about the same thing about they delted my car loan instead of updating it ( i disputed NEVER LATE) so I can't help you there. but i did want to say that just my personal opinion...I would use the extra money to pay down on your cc bills. i would aim on the one w the highest interest rates, i don't know how many cards you are talking, but that is what i would do...HTH and good luck!!!

Link to comment
Share on other sites

I guess I should note that my scores as of this moment are hovering around 600...but I expect some increase in the next couple weeks based on updated info. But no derogs, it has to be my balances that are eating me up...

Link to comment
Share on other sites

Ok, if you have prior copy of your credit report showing the tradeline which got deleted, then call the creditor and ask them to help on re-insterting the missing tradeline, if they can't find you in the system, then provided them with copy of the credit report so they can see what needs to be added back in.

You may get all the info back including the late, but you can go back and good will letter the OC to see if they will remove the late for you.

Link to comment
Share on other sites

Clock is ticking on mortgage rates, would like to have something in process in the next 6-8 weeks...

7 cards...balance/limit as follows:








I know, ouch...

High interest rates on 3 of them, including the big one...

Link to comment
Share on other sites

This is pretty tight what you have - and you said you can't get FHA for what you want. Have you spoke with a lender yet for advice on what you might expect for loan approval and cost involved?

If you do provide; purchased up to date copies of your credit reorts; ask them if you can get approved BUT don't allow them to pull there own credit report without telling you first if they can.

Now back to figures - just on your credit card debt you have 84% utilization right now.

How much capital do you have right now? I think paying $9,000 on cc debt would drop you down to 44% utilization and would really jump your scores (which of course will get you better rate on loan).

Utilization affects 30% of the score (there about) can't say for certain how much, but I do believe it would be considerable jump.

I was thinking along the lines if you could open up another account, but I don't see that possible now, for balance transfers to spread out thinner. Cause you have 7 cc right now, and lender will most likely say that is a lot of available credit to begin with. But I don't know that for certain with out knowing your income. That is where you need to double check with a lender.

Another thing, if you have any AU accounts on your credit report right now - DUMP them, cause the lender will most likely mess up and included this against you in income to debt ratio.

Also, let me grab Charles in to look at what you have here, he is a loan officer available to answer questions, and he could put you closer to an idea on what is do-able right now then I can - ok.

Link to comment
Share on other sites

Ok, I e-mailed Charles - he will be along, oh - just looked at the time, mybe tomorrow then, lol

Authorized User accounts, those account which someone added you to use, but that which you are not responsible for. Having the actual owner of the account call their credit back with request to remove you will take care of this easy enough.

Yes, definitley knowing your income will help him more to figure up what you can get.

Link to comment
Share on other sites

To help answer your questions on what to do with the extra cash, either pay down CC or use for down payment and costs related to home purchase.

You mention that you want to do something in the next 6-8 weeks.

Unless you have about 15K in cash now, (9 to get your balanced down to 50% and the rest for the home) I would just get a temporary loan/band-aid loan, get into your home and refinance later. It seems to take 4-6 weeks for your change in balances to show up as improved scores, so if you don't have it now, and you want a home soon, then just have the balance in your savings account. Some lenders want the money that you are going to pay for closing costs to be seasoned. Which means that they want to see it in your savings/checking/stock accounts 30-60 days prior to funding.

What I mean by a band-aid loan is a 2 year ARM from a sub-prime lender. Chances are you qualify for a 100% loan now, and in two years re-finance with a prime lender. Limits are 95% LTV, 2 to 3 months reserves of total house payments, DTI (Debt to income ratio) of 36% and 640-660 Mid FICO score.

If you want to see your credit scores that a mortgage broker would see to get you the loan, contact your local lender/Loan officer or if you don't have one, then I have decided to run those for people that come to this site, and just charge what my cost is. I have set up a "pay-pal" account and the cost is 14.50. I will send you the report in a *.pdf file. Then take it and cross off your SSN on every page, and then you can show it to other lenders, to have them quote you. Loan Officers hate it when you do that. The reason being is that when we order the report, it drops into our software, if you just send the report, we have to manually enter the data, and it is VERY boring. Just remember that the only one that REALLY cares about you is you. Don't let your credit get worse because the LO sends it off to his 3 lenders-who run your credit-now you have 4 hits, and your precious (to me-and to you) FICO score goes down to below where you can get a 100% loan.

Best of luck. I appreciate kb9tbq for showing me this post.


Link to comment
Share on other sites

Thanks for the input Charles...though it doesn't look as bright as I had hoped. I figured I wouldn't be able to go conforming, seeing how I needed to be able to carry a higher DTI (40-45). I had heard of something called "rapid rescore"...would that be something that could be invoked right after paying down the cc balances to get a score update quicker?

Link to comment
Share on other sites

Repid re-scoring comes at a cost, the results is that the CRAs will update & have new score ready for repull within 5 - 7 days. Also incur cost of credit report being repulled when complete.

There are a few things which they require done first before starting wich can take additional time on the mortgage / process companies part to get this ready. The processer will be required to verify debt, then forward proof to the CRAs who will also verify the debt before procceeding. All documentation must be company letter head paper from each creditor & signed by their personnel stating the fact of the matter. If you can obtain this yourself, then you might be able to assit the processor in moving things a bit faster.

When we initially hooked up for this service, our affiliate told us specifically that the consumer was not to be charged for this service; but since then other lenders have found loopholes I do believe. Cost is another issue it goes like this - (and understand that since we don't use the service / I am looking at what we though would of been re-sell to mortgage companies not consumers & this is when we where first started / so it may be cheaper or more expensive by now). Just an example of what you might expect in cost.

Say $50 per trade line, so if you have 2 tradelines to update that would be 2 x 3 CRAs to update = $300.

And there is alway their disclaimer that they can't garentee the changes improve scores. But in most cases it does unless you are using re-scoring to dispute late payments resulting in deletion on an otherwise good trade that had more to contribute then it was actually hurting (is the best example for losing points - that I know of).

So you can see by this, why we never thought it would fly - expecting banks to eat the cost, and that consumers would really want to face this kind of cost in the end. I personally think that it is extortion - to take that kind of money to update the CRAs. I have talked just last fall with many other lenders that said they really rake in the profits with this service and push it hard. But I have yet never went forward with it.

What I say instead would be to:

Call in your disputes yourself, and get one customer service reps name and that you want to follow up with (him/her) & let them know you want to forward them documentation that is authintic with the letterhead & signature proving the matter.

Let them know your dispute regards a mortgage loan which you are applying for. They will ask who that company is for their records, if you have already had one pull a credit report - you can request that once changes are made that you want them to forward results to this company.

Tell them when exactly your deadline is for closing on the mortgage loan! And that you need a rush on this matter ASAP. This is not such an easy thing to track and know the fact of the matter on their speed at least not when I had done this, unless you have purchased a good monitoring service to reflect the matter.

But I do know that they can rush things, and have referred many many people to do the foot work themselves in this matter & try to save their money for the real things needed like cost on the loan.

[Edit by kb9tbq on [TIME]1056816618[/TIME]]

Link to comment
Share on other sites

This topic is now closed to further replies.

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.