1st time buyer/lender question

[Jim1972]

I'm planning to go to Countrywide in March to attempt to get pre-approved for a mortgage. MyFico score is 638, with one repo that is paid satisfactorly and one account with a 30,60,90 late. I have 2 CC's with a revolving balance of $100 total. Does anyone think I will be accepted or will I face having to go sub-prime? Thanks for any help or advice.

Jim

[Jim1972]

I forgot to add that I need about $160,000 and can put down 5%.

Thanks again

[bbal]

Hi Jim,

The score that you have, did you get it from a consumer site?

Mortgages are scored differently. It is not unusual for your FICO to be lower for mortgages than if you were applying for a credit card.

That being said, anything above 620 should be good enough to go prime, but it will also depend on LTV of the property (which should be 95% or less, if you are putting 5% down) and your debt to income ratio. Should not be too much of a problem with your score. I think loan to value might be the biggest thing to trip you up here.

Also, most lenders take what is called the "mid score" or the middle number of your FICO from all three credit bureaus.

(I am a new loan officer, hence why I am visiting here to learn how to improve my score after finding out how miserable it was...its amazing what I've learned about credit and finances in the last month).

[Jim1972]

Bbal- That score is my middle score (true credit), which I have heard is the score lenders use.

An example of the house I am looking at costs $160,000. I can put down 5%.

I have $100 in debt and gross 50k/year.

I am hoping after a few more on-time payments and trying to delete a couple inquiries, I should be just around a 650 score.

Thanks,
Jim

[bbal]

Then your only question is whether or not Countrywide will do 95% LTV on that. They are one of our corresponding lenders, but would have to dig into their different programs to know whether they would do this. I know that the overall trend is LTV > 80 is requiring a 680+ on a lot of lenders, but not all (some as high as 700 or 720).

But you have the right course of action, get things caught up, paid down/off, bring your score up over a small period of time. Best of luck with your loan! I hope you get it.

[MortgageMan]

Hard to say if you will get electronic approval from Fannie Mae or Freddie Mac, you could.

When you are ready to apply find three mortgage brokers you are comfortable with. Have each of them try to get an approval. Make sure they are trying to get an electronic approval from Fannie Mae or Freddie Mac.

After all CountryWide has a wholesale side as well and the retail loan officers do not have flexibility a broker has. I work for a mortgage broker and we have done loans for bank employees because most banks wholesale side plays be different rules then their retail side.

I hope that helps.

[Dhonda]

mortgageman is right on with this one.. Go to a broker they have more options for you. That score is still in the sub prime arena and CW retail is no the best way to go. depending on your income , dti, and area you wish to buy .. there is a program called my community mortgage that is like a prime mortgage for lower score folks. rates of around 7% compared to subprime rates of 9% . There is pmi with the my community program but it is low and now is tax deductable. Make sure you shop around a little, unfortunatly there are some brokers that are bad eggs and will screw you over at the closing table.

You will have PMI on a prime loan over 80% LTV, but I would not count on it being tax deductible. The latest I read about it mentioned that the wording was changed so that it is only tax deductible for 2007. In any event, PMI is not a factor once your house appreciates to the point where the LTV is under 80%.

[Ally]

You might want to check around your local area, too. There are many regional banks and credit unions that offer financing for homes.

Good luck and let us know how things go!