mrbean Posted December 1, 2004 Report Share Posted December 1, 2004 Hello allI had a bk7 discharged one year ago (12/3). I started rebuilding my credit within a week after my discharge by obtaining an auto loan ($490/mo), and two credit cards shortly thereafter. All payments have been made on time and my usage on my credit cards is like 4% (limits are 500 and 300).My main goal is to be able to get financing on a home in another year. There are several tradelines on my cr that are not showing "IIB" as they should. I am in the process of trying to get these completely deleted first, and then of course settling for "IIB" if I am unsuccessful getting the deletions. I am also in the process of trying to get a checking and savings account within the next month.My question is regarding my debt-to-income when it comes time to apply for financing. I am located in an area of central Florida where housing costs for a decent home are $140,000. I currently make about $38,000/yr based on my hourly wages. With overtime, I will gross a minimun of $43,000 this year. I am confident that I could make a mortgage PITI payment of $1100/mo without my auto loan. With my auto loan, I highly doubt a bank would approve me for anything over $50k. Is there any way a bank would allow me to rollover my auto loan into my mortgage? I owe $14000 on my vehicle. I could probably work a ridiculous amount of overtime in the next year and pay this vehicle off, but that would leave me without the positive 2 year tradeline that I need so badly. What should I do?I sincerely appreciate any info or advice you could offer me. Link to comment Share on other sites More sharing options...
firstsource Posted December 1, 2004 Report Share Posted December 1, 2004 You are really on track, and should be able to qualify for a home loan when you are ready. Several things for your long term planning:About 6 months before you get your financing arranged, refiance your car. You should be able to lower the rate a lot by then. I have somewhere a name of a lender that works well with post bk people, once they have "decent " credit scores, I will find it and post that name.If you want to buy in Orlando, check into how much property taxes are, as they are an important part of the financing picture. You CAN go as high as 50% DTI (percentage of pretax income that goes to CC's, Car, PITI for your home), but of course better to not go that high. I recommend that you contact AMICA for your car insurance, and if they save you money, go with them. They do not check credit, so their rates are normally lower than anyone else for my clients. Lastly, if you are going to need the additional income, to keep your DTI under the 50% level, you will need to show that you have been getting overtime for the 2 years prior to applying for your home loan. Start keeping your paystubs, and if you got overtime last year, try to find the last paystub for the year, with YTD info on how much you earned from bonus/overtime/etc income. Hope that helps. Charles Link to comment Share on other sites More sharing options...
DocPC Posted December 1, 2004 Report Share Posted December 1, 2004 You are really on track, and should be able to qualify for a home loan when you are ready. Several things for your long term planning:About 6 months before you get your financing arranged, refiance your car. You should be able to lower the rate a lot by then. I have somewhere a name of a lender that works well with post bk people, once they have "decent " credit scores, I will find it and post that name.If you want to buy in Orlando, check into how much property taxes are, as they are an important part of the financing picture. You CAN go as high as 50% DTI (percentage of pretax income that goes to CC's, Car, PITI for your home), but of course better to not go that high. I recommend that you contact AMICA for your car insurance, and if they save you money, go with them. They do not check credit, so their rates are normally lower than anyone else for my clients. Lastly, if you are going to need the additional income, to keep your DTI under the 50% level, you will need to show that you have been getting overtime for the 2 years prior to applying for your home loan. Start keeping your paystubs, and if you got overtime last year, try to find the last paystub for the year, with YTD info on how much you earned from bonus/overtime/etc income. Hope that helps. CharlesJust a little correction Charles....Amica WILL pull for Auto ins but not homeowners.Just an FYI. Link to comment Share on other sites More sharing options...
firstsource Posted December 1, 2004 Report Share Posted December 1, 2004 Thanks for the correction.Charles Link to comment Share on other sites More sharing options...
mrbean Posted December 2, 2004 Author Report Share Posted December 2, 2004 Thanks for the reply, guys!!Well, I was able to get a checking account through Wachovia bank yesterday. I will be opening a savings account with them next week. I am also going to go to a credit union next week and open a savings account and deposit $1000, which I will use as collateral for obtaining a small loan with them. If I am able to obtain this loan, which I will easily be able to pay back, I will have 4 positive tradelines to show since the bk.I also spoke with my parents, who have immaculate credit, about including me as an authorized user on a few of their high limt/low balance (1 under 10% utilization + 1 under 3% utilization) credit card accounts. The accounts are both over 10 years old. They offered to make me an authorized user on 3 other accounts aswell, however, they plan on making some purchases on the cards that would bring the utilization over 30%, so I declined.So if all goes according to plan, I will have a total of 6 positive tradelines showing on my credit report within the next month. Link to comment Share on other sites More sharing options...
firstsource Posted December 2, 2004 Report Share Posted December 2, 2004 My thoughts: I would suggest that you take them up on the offer. Once they all start to report, you will get a feel for what your scores can be with all of their accounts. A few months before you start the financing process, check to see how much they owe on the cards, and if it is too much for your DTI to work, then have them take you off. Charles Link to comment Share on other sites More sharing options...
mrbean Posted January 10, 2005 Author Report Share Posted January 10, 2005 Hello again. I thought I would add a little update.Using much of the info and tips from this site, I have been working on getting as many negative tradelines deleted from my credit reports since my last post. I have a total of 6 collections deleted from all three cr's leaving me with zero on every report. I have also gotten a total of 19 negative tradelines deleted from all 3 cr's.Transunion fico score has gone from 610 to 681Equifax fico score has gone from 620 to 672Experian has gone from 580 to 605 ( I still have one account that is showing as open and past due with a $3600 past due balance. This is, of course, killing my utilization thereby killing my score. I expect the score to raise to within 10 points of the other two after I get this reported correctly.I figure that as long as I keep up the payments on my current tradelines, not to mention get the authorized user accounts from my parents, I will be in the "700 club" with my ficos next year when I am ready to apply for the mortgage.Thanks again for all your advice and help. Link to comment Share on other sites More sharing options...
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