Posted on: 28th Jan, 2010 07:43 am
Again, ugh... I'm going to try to explain this as clearly as I can..
So in the beginning of January, I subscribed to Score Watch and pulled my TransUnion and Equifax report. TransUnion: 614, Equifax: 621. Just for the heck of it, I decided to look into buying a home. I got in touch with a mortgage lender and a real estate friend. I met with the lender and we discussed my financial situation. I had 11 credit cards all maxed out. My last late payments was in 2006. I also have student loans and a car loan. So obviously I thought I would not qualify for a loan. Surprisingly, my Beacon score (combo of all three) came back at 624. I qualified. The hard part was finding a mortgage that I could deal with. Well, I found a foreclosured house for $64,900 and it was perfect. Nothing wrong with it at all. Best of all, it fit my mortgage pmts!! Plus, I qualified for a 0% interest, 5 year deferred loan from North Carolina to use towards my downpayment and closing costs because I was buying a foreclosure (think of it as a free $14,900 as long as I live in the house for 5 years). So really, I needed a home loan for only $50,000. Great!! I put an offer in on the house hoping the bank would come back to me fairly soon.. Usually it takes awhile for bank owned foreclosures to accept the offer. Four hours later it was accepted. Closing date set to March 11th.
Here comes the problem. I had to switch lenders. There's only a few lenders in NC that deal with the $14,900 special loan. So my lender recommended a friend of his that could take care of me. Great!! Just two days ago, I got an alert from Score Watch. My Equifax score dropped to 601 from one late payment I accidently made back in December 2009. CRAP! I am scared and believe that my Beacon score has also dropped. Quite probable that it dropped to under 620 (which is the minimum score needed). I got in touch with my new lender and asked him if he has pulled my credit report yet. I told him that last time I checked my Beacon score was with my last lender and it was 624. He asked me to fax him over the credit report my last lender gave me so he could look at it. I also informed him that I plan on paying off the majority of my cards (which HOPEFULLY will raise my score)... So yesterday I faxed him over my credit report and proof of what credit cards I'm paying off. A week from today, all 11 of my maxed out credit cards will be completely paid off. Whether that will show up on my credit report on time or not, who knows.
So what do I do?? What if my score has dropped but it goes back up over 620 by the end of February? Can I "reapply" for a mortgage then? I'm not sure if I have until March 11th to get everything finalized or what. A part of me thinks that I have no time left and I'm (pardon my language) screwed. Another part of me seems to think that I have some time to get everything straightened out. Now, remember, my new lender has NOT pulled my new credit report yet... Sigh.. Someone please help or give me advice. I'm a first-time homebuyer and everything is moving way too fast and way too foreign to me. Thanks guys!!!
So in the beginning of January, I subscribed to Score Watch and pulled my TransUnion and Equifax report. TransUnion: 614, Equifax: 621. Just for the heck of it, I decided to look into buying a home. I got in touch with a mortgage lender and a real estate friend. I met with the lender and we discussed my financial situation. I had 11 credit cards all maxed out. My last late payments was in 2006. I also have student loans and a car loan. So obviously I thought I would not qualify for a loan. Surprisingly, my Beacon score (combo of all three) came back at 624. I qualified. The hard part was finding a mortgage that I could deal with. Well, I found a foreclosured house for $64,900 and it was perfect. Nothing wrong with it at all. Best of all, it fit my mortgage pmts!! Plus, I qualified for a 0% interest, 5 year deferred loan from North Carolina to use towards my downpayment and closing costs because I was buying a foreclosure (think of it as a free $14,900 as long as I live in the house for 5 years). So really, I needed a home loan for only $50,000. Great!! I put an offer in on the house hoping the bank would come back to me fairly soon.. Usually it takes awhile for bank owned foreclosures to accept the offer. Four hours later it was accepted. Closing date set to March 11th.
Here comes the problem. I had to switch lenders. There's only a few lenders in NC that deal with the $14,900 special loan. So my lender recommended a friend of his that could take care of me. Great!! Just two days ago, I got an alert from Score Watch. My Equifax score dropped to 601 from one late payment I accidently made back in December 2009. CRAP! I am scared and believe that my Beacon score has also dropped. Quite probable that it dropped to under 620 (which is the minimum score needed). I got in touch with my new lender and asked him if he has pulled my credit report yet. I told him that last time I checked my Beacon score was with my last lender and it was 624. He asked me to fax him over the credit report my last lender gave me so he could look at it. I also informed him that I plan on paying off the majority of my cards (which HOPEFULLY will raise my score)... So yesterday I faxed him over my credit report and proof of what credit cards I'm paying off. A week from today, all 11 of my maxed out credit cards will be completely paid off. Whether that will show up on my credit report on time or not, who knows.
So what do I do?? What if my score has dropped but it goes back up over 620 by the end of February? Can I "reapply" for a mortgage then? I'm not sure if I have until March 11th to get everything finalized or what. A part of me thinks that I have no time left and I'm (pardon my language) screwed. Another part of me seems to think that I have some time to get everything straightened out. Now, remember, my new lender has NOT pulled my new credit report yet... Sigh.. Someone please help or give me advice. I'm a first-time homebuyer and everything is moving way too fast and way too foreign to me. Thanks guys!!!
Move along with the process. See if he has a "credit simulator" that will show you what can immediately be done to increase your scores. Don't get yourself crazy. If your "maxed out cards"will soon have a low or zero balance, do a rapid rescore. Your scores should increase and you should be ok.
Okay, I'll check with my lender. Sigh.. my scores dropped to TransUnion 563 and Equifax 601. I don't know what Experian is. Let me just say, I just mailed off Good Will Adjustment letters, hoping that late payments will be removed. Also, when do you need to have a mortgage completed? If I'm closing March 11th, what's the latest time I can apply for a mortgage? Thanks!
I would advise applying now and beginning the process.
If my DTI for a FHA loan is 41%, with 620 beacon score, am i able to get the loan?
Thanks for your help.
Thanks for your help.
You shouldn't have any issues.
danielle, i advise that you seek an extension on your purchase contract to take you beyond that march 11 date. obviously if your score has dipped below the 620 threshhold, you're going to need more time to get it back up to where it needs to be. make sure that you act as quickly as possible on this as well as on your repayment of those accounts, and obtain the extension for as long as possible.
