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Am I going to get denied?


fyr196
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I have worked hard to repair my credit. I was able to remove all but 3 baddies. I went from a 509 average to a 697 average. I have had the same job for 11 years, now making 73K a year. My wife has a 780 average score, and makes 30K a year. I have had no lates for the past 7 years and I carry 1K in credit debt. I have 2 cars with no lates and my debt to income ratio is well under what is average. I was asked by the underwriter for a letter of explination for the 2 Midland and 1 Applied bank balances not paid and in collections. I'm sending a well worded letter and I hope that is sufficient.

My question is; am I going to get rejected or do I have a chance for this mortgage? We are doing FHA with 3.5% down.

Thanks to anyone who can help with an answer.

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I have worked hard to repair my credit. I was able to remove all but 3 baddies. I went from a 509 average to a 697 average. I have had the same job for 11 years, now making 73K a year. My wife has a 780 average score, and makes 30K a year. I have had no lates for the past 7 years and I carry 1K in credit debt. I have 2 cars with no lates and my debt to income ratio is well under what is average. I was asked by the underwriter for a letter of explination for the 2 Midland and 1 Applied bank balances not paid and in collections. I'm sending a well worded letter and I hope that is sufficient.

My question is; am I going to get rejected or do I have a chance for this mortgage? We are doing FHA with 3.5% down.

Thanks to anyone who can help with an answer.

I hope it is sufficient too, but you may want to look into having those collection items deleted.

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Are the collections recent? You had mentioned that you had a clean payment history for the past 7 years but is that aside from the collections?

Either way, the underwriter asking for a letter of explanation is almost standard nowadays. Given the rest of your current credit situation they may take everything into consideration and not ask that the accounts be paid prior to closing. This is not uncommon.

However its better to be safe than sorry and if it were me, I would simply make sure that I had the extra funds to cover the collections account should the lender request they be paid.

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  • 3 weeks later...
I have worked hard to repair my credit. I was able to remove all but 3 baddies. I went from a 509 average to a 697 average. I have had the same job for 11 years, now making 73K a year. My wife has a 780 average score, and makes 30K a year. I have had no lates for the past 7 years and I carry 1K in credit debt. I have 2 cars with no lates and my debt to income ratio is well under what is average. I was asked by the underwriter for a letter of explanation for the 2 Midland and 1 Applied bank balances not paid and in collections. I'm sending a well worded letter and I hope that is sufficient.

My question is; am I going to get rejected or do I have a chance for this mortgage? We are doing FHA with 3.5% down.

Thanks to anyone who can help with an answer.

Missing is assets - banks want to see you have at least 6 months (seasoned) reserves in the bank.

Suggestion - on your installment debt (car payment), start sending in extra with your normal payment. After a few months this gets reported as you are being more responsible. The CB's rewards you by raising your credit score.

:)

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You can use things like a % of 401k, Roth IRA, 403bs, etc. as reseves. I had to do this in 2007 with FHA and it was plenty. And I was told six weeks ago (when I thought I may buy a home) that nothing had changed regarding reserves.

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  • 2 weeks later...
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